The times. [volume] (Richmond, Va.) 1890-1903, 1900-10-02
TUESDAY, OCTOBER ., 1900.
OF INTEREST TO THE BANKIiis.
ASSOCIATION.

The announcement that a case Is about
to be carried to the Supreme Court OF the
E,ited States TO test the constitutionality
of the act OF Congress that imposes q pro-
fbitory tax upon the issue of currency
notes by the banks Of the State is one
that will rejoice the hearts of millions of
citizens of the United States The act
practically contiscates the credit of the
great body Of the people of the country
in the interest of the comparatively few
VITO oHn and control the National banks
1t is the most grinding tyranny that any
civilized people. ever submitted to and it
is a striking illustration of how a system
of indirect taxation, however hurdensome,
will be patiently endured by a people
for the reason that the great body Of
them can never be made to see and under
stand where the Incidence of such a tax
falls In speaking of this tax as an in
direct tax, We speak, of course, of its effect
upon the people at large. 1t is a direct
tax so far as it falls upon the notes Of
the State banks.
The man vino undertakes to predict how
any court viii decide any given case is a
very rash man indeed.
But there is very great reason to believe
tnat the Supreme Court will decide in this
case that the act Of Congress is repusnant
To the Constitution. That tribunal has al
ready decided, ii is true, that this act is
constitutional in the case of Veaz!e Bank
Us. Fenno. But the question goes there
now in a very different form, that in which
it went there before. When it went there
before, Adam Smiths theory Of direct and
indirect taxation, which had been adopted
by the Supreme Court in Hilton vs.. The
United States, wfts the accepted doctrine
of that court. The act of Congress inn
posing the tax Oh the notes Of State banks
was attacked in Eeazie Bank VS.. Fenno
upon the ground that it was :; direct tax
and not apportoned as the Constitution
requires all direct taxes TO be. The ST.
i,reme Court. following the doctrines Of
Hilton Us. United States. held that 1t was
no, a direct tax, but one OF Adam Smiths
Indirect taxes. If that were still The doc
1rine Of the Supreme Court there would
DO but little chance OF its declaring the
act OF Congress unconstitutional now But
its decision in the income tax case repu-
dates and overtIlrows the doctrine Of Hill
ton US. The United States and holds. IN
effect. that all taxes aimed directly al
subject are direct taxes. This in effect
oserrules yeazie Bank rs. Fenno, so as
10 leave the question an open ono when il
gets 10 the supreme Court.
The case VIII now turn. IN all probability,
upon oihe question whether the Constitution
intended 20 give Congress a control over
the paper issues that were to be used by
the people as currency. and there ought
no; to be much doubt about how the court
NIL decide that, as it is very clear the
Constitution intended that The functions
of Congress should be confined TO coming
money and regulating the value thereof
II lie court decides that the aet of Con-
s1'ess is void, that viii most probably an
polre also a decision that The Government
cannot issue legal tender notes. which will
be a complies revolution of orr currency
system. i'pc Viii be the greatest blessing
that could befall the American people