The Montgomery advertiser., 1909-07-09
TRUSTS Will.
RESENT TAX:
Corporations Oppose New
Legislation.
WILL APPEN TO COURTS
Constitutionality Of Law to Be
Tested.
Believed Action VIII he Taken to De-
lay Collection Of Proposed Reve-
nue-Treasury oMcials
Not Worried.

Washington, July s.-Conhrmation
Of the expectation in many quarters
that the large corporations of the
country will seek to hold UP the COL
lection of taxes under the corporation
tax bill, II that measure 10 enacted.
by an appeal to the courts to test the
constitutionality Of the law was given
here today by q prominent official OF the
Treasury Department who has just re-
turned from New York and who re-
fuses to be quoted by name.
The possibility Of suspension Of this
expected large source OF revenue and
the possible necessity in that event Of q
bond issue by the Government to meet
the situation in the treasury has caused
concern not alone to the treasury Of
hcials but to political leaders, who
point to the political consequences to
the bond issues Of the Cleveland adj
ministration. 1t would be within the
provision Of q court, II 10 conceded. to
permit the taxes to be collected. sub
ject to q refund, but such course II
unusual and 1t 10 q well-known fact
that money once paid into the treasury
is exceedingly hard TO get back and
even when returned involves q multi
plicity of complications.
Secretary Of the Treasury MacVeagh
is out Of the city but an Official of the
Department Of Justice declared today
that he believed the bill as now framed
10 clearly constitutional and that any
action looking to q test OF constitution
atty would not prevent the Secretary
of the Treasury from proceeding 70
collect the tax In the usual way.
The Department Of Justice officials
not. only believe the bill II enacted.
will be found to be constitutional, but
that pending q determination Of the
case In the courts II such action is
taken, the collection OF the tax will not
be interrupted.
should the tax bill be declared to be
unconstitutional, the persons paying
1t, In his opinion, would have ample
recourse to compel its return. but even
should the courts decide to grant
temporary injunction restraining inc
Secretary from collecting the tax, II Is
pointed out that the Secretary has
ample resources at hand with which to
meet all obligations and fully sustain
the Government credit. The Govern
ment receipts are now increasing at a
gratifying rate, but should necessity re-
auire. the Secretary may. at any time.
in his discretion, under the laws now
in force Issue up to s40.0Oo.0O0 Panama
Canal 2 per cent bonds and in addition
he is able under existing laws to issue
up to s100,000.00o 3 per cent treasury
certificates Of indebtedness. Thus. 1t
lis claimed that in any event and what
ever action the courts might see At to
take with respect to the collection of
the tax under a corporation tax act,
the Treasury is in no danger whatever.
of being short of funds. -v.s,s avr
Attention was called to the fact that
the bill has been framed by some OF
the brightest lawyers in this country
and In the views of treasury authors
ties, 1t would be very unlikely that
their combined efforts would result
in a measure at variance with the pro-
visions of the constitution.