The evening times. [volume] (Washington, D.C.) 1895-1902, 1901-08-02

Congress Relating tn stamps Upon I.
Securities Handled ON the Ground /
of Alleged UncunstitUtiOnnItty-i
= George c. Thomas. a member OF the /
Board of Directors OF the Consolidated F.
Stock and Petroleum Exchange, OF New 4
York. who openly refused 60 comply with /
the act of Congress imposing a special /
tax OF s. upon every 100 shares of stock .
sold or transferred. was today placed UNI T.
der arrest in New York city by direction I
of John w Yerkes, the Commissioner Of /
Internal Revenue.
This il is understood will result in a .
thorough test of the validity OF the stamp
act. which Mr.. Thomas contends is i'm part
unconstitutional
The controversy has attracted consider
able interest throughout the country and
especially in the larger cities. where
transactions in stocks and other secUri-
ties are frequent. The matter was first
brought TO the attention Of the Commis-
sioner Of Internal Revenue a few days
ago, when--he was informed by the coll
Iector Of internal revenue for the Second
District of New York that Mr.. Thomas
had refused To- pay the Government tax
on stock sold or transferred. 10 was ey-
planned that Mr.. Thomas claimed that tho
tax was unconstitutional and the CaUec-
tor at New York asked for Instructions as
e. what course 10 pursue
Mr.. Nerkes Immediately advised him TO
lay the matter before the District At
trrney and in. conjunction with him TO
institute legal proceedings against Mr.
Thomas The law which Mr.. Thomas
holds Co De unconstitutional is a part Of
the act of june L.. l>eS as amended by
stctiopS. act of March p 1901. schedule A.
and rClstes % stamp taxes. The part OBJ
jected 60 reads as follows. ION an
sales, or agreements TO- Sell. or m,moran-
On Of sales or deliveries or transfers Of
shares Or cg-rtl fFra t,s of stock in any as
spci2uon. company. or corporation.
Whtther made upon or shown by the
hDoks. of.the association company. CO.. cor
IprntioL, o. hy any assignment In blank.
or by any delivery. or boy any paper or
agreement or memorandum or 0the. evil
deUce Of transfer or sale whether enti-
ting the holder in any manner 60 the
benefit Of such stock. or to secure the fu-
ture payment Of money OF for the future
transfer OF any stock. or each hundred
dollars Of face. value or fraction thereof.
2lcents 90
sThe rosult-of Mr. Yerkes' instructions
was that ar. Thomas was arrested today
BY an agent OF the Internal Revenue De
pAEtmsutt The arrest Of Mr. Thomas was
made on his own invitation. as Mr.. Thorn
as had decided To make "A test case by
transferring stock without amNiug the
stamps and paying the tax.
on May - Mr.. Thomas began To defy
the Collector Of Internal Revenue. and.
IN order that there should be no. conceal
ment Of his disobedieuCe Of the revenue
law, he made a report To his legal advis-
ers, and the lawyers sent notice 90 Col
lector Treat Mr. Thomas has continued
20 transfer stocks unstamped since May.
arA the LAWYERS have continued To Keep
Mr.. Treat Informed Of the brokers' con-
tumaCiUus attitude but tn collector
made no move TO enforce the regulations
in the case Of Mr. Thomas until yester-
day. when revenue agent waited upon
Mr. Thomas and told him 20 appear at
the office Of Collector Treat az noon to-
day and be arrested.
IT was learned that there was an ar
arrangement 10 have Mr.. Thomas taken
before United States Commissioner
Shields and held for trial on the charge
Of violating the Internal Revenue law
Mr.. Thomas was able - give bail and
his counsel dernurred 10 his trial on the
ground that the law providing for the
tax ne refused TO pay is U=coEstitutiou-
al II tho contention Of the lawyers is
sustained by the courts. Mr.. Thomas gets
constitutional. ne has no defence and
must plead guilty TO the charge Of violat-
ing the laW-
The penalty FOR violating the tax reg
ulatiou is a fine Of not less than 500 and
net more than s. OJG. OF Imprisonment for
six months. or both. in the discretion Of
the court.
As Mr.. Thomas has been refusing 20 pay
the tax for more than two months. fl is
alleged that he has made himself liable
TO fines amounting 20 more than 100000
and 70 imprisonment for about 800 years
Tfe was reported 10 have said yesterday
that he might be willing 10 be kept in
Jail 500 years II the fines were RENTED.
Many brokers win be interested IN the
case Of Mr.. Thomas, because the tax on
stock transfers viii have 70 stop II the
law is declared unconstitutional and
brokers who have paid the tax will have
claims against the Government for the
amount Of the tax collected.
In speaking Of the matter Mr.. Terkes
said this morning that lnasmuch as the
matter is now in the hands OF tho judi
ciary. he cid not care 70 give an opinion
on the matter.