The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1909-07-09

TO FIGHT THE
INCOME TAX
Constitutional Test Will Be
Made if the Bill Is
Passed
FAILURE TO COLLECT THE
REVENUE WILL Be SERIOUS
But 1t Is Believed the Deficit Can he
Overcome by the Issuance of Pana.
ma Bonds and Treasury Certificates
Of Indebtedness.

Washington, July 9-Confirmation
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, If that measure is enacted,
by an appeal to the courts to test the
constitutionality of the law. was given
here today by prominent official of
the treasury department, who has just
returned 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 bond issue by the government to
meet the situation in the treasury has
caused concern, not alone to the
treasury officials, but to political
leaders who point to the political con-
sequences attributed to the bond is
sues of the Cleveland administration.
1t would be in the provision of court,
it is conceded, to permit the taxes to
be collected, subject to a refund, but
such course is unusual and it is a
we'll known fact that money once paid
into the treasury is exceedingly hard
to get back, and even when returned,
tions.
Secretary of the Treasury Mac
Veagh is out of the city but an Of
flclal of the department, who is quail
fled to speak on the subject, declar-
ed today that he believed the bill as
now framed is clearly constitutional
and that any action looking to test
of constitutionality would not prevent
the secretary of the treasury from
proceeding to collect the tax in the
.susuaf way.
The department of justice officials
not only believe that the bill, if en-
acted. will be found to be constitu-
tional. but that pending a determina-
ton of the case in the courts. if such
action is taken, the collection of the
tax will not be interrupted.
Should the tax bill be declared to
be unconstitutional the persons pay
ing it, in his opinion. would have
ample recourse to compel it's return,
but even should the courts decide to
grant temporary injunction restrain
ing the secretary from collecting the
tax, it is pointed out that the secre-
tary has ample resources at hand with
which to meet all obligations and full
ly sustain the government credit
The government receipts are now
increasing at gratifying rate, but
should necessity require. the secre-
tary may at any time. in his discre-
ton. under the laws now in force.
issue up to $40,O0O,OOO Panama canal
two per cent bonds. and in addition,
he is able, under existing law. to is
sue up to $1o0,O0OOOO three per cent
treasury certificates of Indebtedness.
Thus, it is claimed that in any event
and whatever action the courts might
see fit to take with respect to the col
lection of the tax under corporation
tax act. the treasury is in no danger
whatever Of being short of funds.
Attention was called to the fact that
the bill has been framed by some of
the brightest lawyers in this coun-
try, and in the views of treasury au-
thorites. it would be very likely that
their combined efforts would result in
a measure at variance with the provi-
sions of the constitution.