New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-08-28
STOCK TAX LAW ERROR
INVALID ACT REPASSED.
Payments by Brokers Not Likely 10
BE affected, IL Is SAID.

Stock Exchange circles yesterday were CONSIDER
ably interested I'm the announcement OF the as
cOVery of what appeared TO be a legal nlundef IN
the enactment of the new consolidated laws by the
last legislature The mistake makes Illegal, it
is said, the collection of the stock transfer tax OF
cents every 500 worth OF stock sold The
20 he that the board of statutory re-
vision incorporated the stock transfer tax OF 1905
which was declared unconstitutional by the Court
OF Appeals in January, 1907 in the new laws. IN
stead OF the stock transfer tax law OF 1850 The
latter declared constitutional by the Court OF
Appeals about three years
The. miK-up in the law discovered several
weeks ago by Charles ]. McDermOtt Of J. w a.
{. ]. McDermott. lawyers. OF No. Rector street
who making investigation OF the law al the
request of Charles A. Morse d. Co. and a NUMBER OF
other Stock Exchange houses. The Stock Exchange
authorities informed OF the blunder and it was
said yesterday that their lawyer, Lewis Cass Leu
yard had the matter under Amusement and would
render opinion shortly whether the tax need De
paid under the circumstances. and whether the
money already paid could be hereafter regained.
Reports that a number Of brokerage houses were
considering insuting legal proceedings for the re-
cOveFy OF money paid 10 the state since Februaiy
~ when the consolidated laws became operative
were said without foundation in well informed
quarters. Mr.. McDermott said that no such action
was contemplated by any of his clients or any
other Stock Exchange houses, 50 far as he was
swsre, ana that he did not think any money al
ready paid for the could be recovered as IL mao
not been paid under protest. The quickest way 10
decide whether il was necessary 10 continue pay
ing the tax he said, would he 20 bring test case
ny arranging have some man buy stocks ana
then refuse 10 pay the transfer tax.
Brokers who seen said that they were quite
content 10 let things go along they were, as the
tax was not paid by them but by their customers
They said they would no account bring sun 10
recover the money already paid for stamps, as mat
would make necessary returning IL 10 their custom
erx which would be impossible in many cases and
involve great trouble and expense in others
The importance the state Of the legality OF the
stock transfer tax is shown by the fact that SINCE
February upward Of 100000 has been collected
by the state Controller AT Albany through the sale
az transfer stamps the monthly average being
well over $4,000. In June il amounted TO S5li,Ss-
How the blunder came 70 be MADE - ho'
known. Mr.. McDermott said that he wrote TO
Governor Hughes calling his attention 10 the ms
take in the law on August 4. but far had re-
oeired merely formal letter from the Governor
acknowledging the receipt of his communication.
The consolidated laws Of New York went INTO
eject on February L. 1909. They included all the
laws of the state down that date. compiled and
condensed by a special board appointed by the
Legislature in lS0s. The members Of this board
were A. J. Rodenbeck, lawyer. of Rochester;
Adelbert Moot. a member Of the bar in Buffalo,
and William b. Hornblower and John g. Milburn,
Of this city Mr. Milburn is Al present in Europe
and is not expected back before the middle Of Sep
TENDER and the other New York City member. Mr.
HOrnhlower. is spending the summer Al his coun-
Try place AT CooperstoWn. y. y.
A prominent lawyer, when asked for his opinion
regarding the recovery Of any money paid for
transfer stamps since the consolidated laws be-
effective. said he was inclined 10 think the
courts II appealed TO- would decide that it would
he against public policy for the state 10 suffer from
what might he only 6 clerical error.
by Telegraph The Tribune !
Albany Aug. 27.-An inadvertent error made in
the repeal of a law by the Legislature may be
wholly ignored and the law may remain unaffected
by such repeal 81 was pointed out tonight by Dean
Alden. legal adviser of Governor Hughes He had
been asked regarding the announcement that the
stock transfer law not the statute books,
through clerical error, and that the state might
lose the revenue from this source until such time
as the Legislature might re-enact the Law. Dean
Alden said:
The courts have held that the repeal Of law
BY the Legislature. when apparently mad
vertent error made, may be wholly ignored
and the law declared 10 remain in force and unaf-
fected by the repeal The Legislature did in