Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1899-04-05
WAR TAX ON BROK Frs.
Supreme Court Affirms the Valid
ity of Revenue Act Regard
ing Board Of Trade Deals.

" aSnlngtOn. -. u. ADrll 5.-1l the
United States Supreme court today an
opinion was handed down by Justice
Peckham in several cases involving the
invalidity of the war revenue act. The
cases were those of James Nico VS.
James Ames. United States marshal; pc
tition for habeas corpus by George r.
Nichols, petitioner; Edwin Skillen, appel
liant rs. the marshal and Charles H.
IngWersen, plaintiff in error. VS.. the
United States. The cases come from the
Chicago federal courts.
These cases involve especially the in
validity of the tax provided by the war
revenue act upon sales and contracts to
sell merchandise upon exchanges, boards
of trade or similar places. The war rev
enue act requires a memorandum to be
made of the transaction, and a STAMP
affixed, 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 tho
phases involved in the stock transactions
on the board of trade at Chicago. The
case of Ingwersen involves the question
as to whether the Union Stockyards al
Chicago is an exchange or similar place
making sales there taxable
The court in its opinion sustained the
validity of the tax, and held that the
stockyards is place similar to an ex
change, making it's transactions liable tC
the tax. The case was argued by ex-Sec
rotary Carlisle and Mr.. Robbins of Chi
cago for the petitioners, and by }. X,
Richards, solicitor for the gov
eminent. Mr.. Carlisle contended that
the tax upon sales on exchanges is di
rect tax, first, because tax upon sales
is virtually a 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
uniformity, because not imposed upon all
sales whenever made.
The point was also made that II an
indirect tax, it is stamp tax on docu-
ments, and that Congress had no power
to require a written memorand um to be
made upon transactions within 81 state
for the purpose of taxing such memoran-
dums.
The court in it's opinion carefully dis
cusses all these objections and overrules
them. 1t holds the tax is not a 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"
cit 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 it's 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, Il just
ground for classification for purposes of
taxation by Congress of transactions
there The flexible character of the tax
ing power and the possibility of adapting
it to changing conditions IS described by
IL, 4 ot1xr lnl. a n
order to tax a privilege or facility in
jured, it is not necessary that it should
be created by the government.
The requirement of a memorandum is
upheld because it is necessary for the
collection of a tax. 1t is pronounced uni
the special privileges or facilities Incl
dent to the transaction Of business at
boards of trade and similar places.
Referring to the stock yards case, JUS
tice Peckham said "a Derusal of the
facts contained III the record of the case
shows that these yards answer all the
purposes of an exchange or board of
trade and that they in truth amount ill
substance to the same thing.
THE differences existing between them
are incOnseCuential, SO far as this point
is concerned.
In the matter of the petition for writ
of habeas corpus, the petition was denied
the court and district courts were af4
firmed.
Views of Chicago Brokers.
Chicago. H., April 3.-George f.
Stone, secretary of the Chicago board OF
trade. was much interested today in the
Supreme court decision sustaining tho
validity of the war revenue act. Hd
said, however, that he had as yet re-
ceived no official notice Of the decision
and he was not able at present to say
what action would be taken in the mat
ter by the Chicago board Of trade.
Inquiry by the Associated press among
others familiar with board of trade meth
DDS developed the fact that no attempt
has been made to evade the revenue tax
on the Chicago exchange, but that there
has been a question as to whether bro
kerS must pay tax on every trade made
in the pits, or whether by system of
transfers they could eliminate a number
of intermediate sactions, the tax fall
ing on the ultimate seller with whom the
trade is finally checked al the end of the
day. Every trade that becomes matter
of record on the books of any board of
trade house pays the tax. The only
question is on transferring Of trades be-
hy.ol