Evening star., 1909-07-02
LEGAL TERMS BAND|ED|
Senate Lawyers Discuss Cor |
poration Tax Wording.
CRITICISM BY HEPBURN
Claims That Phraseology Is Vague
and Will Not Stand in Court.
GOSSIP AS TO TINE OF VOTE
Many Predict That Division Will Be
Taken on the Income Tax Amend
ment Tomorrow.

Senator Aldrich chairman of the finance
committee, was in his seat in the Senate
this morning after an absence of two
days. 1t was the prospect of reaching an
agreement to vote on the corporation tax
| at an early date that lured him from his
seclusion. 1t has become evident during
the two days that the tax has been under
discussion that the debate will not be as
protracted as was at first expected. unless
some new phase Of the subject looms up
| The return of Mr.. Aldrich had the effect
OF causing much gossip as to the possi-
biilties with reference to getting a vote
on the income tax proposition. There was
no approach to any agreement during the
morning hours, but most senator's were
of opinion that the end was near. The
fact that only Mr.. Bulkeley's objection
yesterday stood in the way OF fixing the
vote for next Tuesday. and the further
fact that debate on the proposition then
seemed almost exhausted led to the quite
general conclusion that the vote would
be reached by that time If not much
earlier.
Early Vote Predicted.
Many predicted it for tomorrow, and
some were even inclined to think that it
might take place before adjournment to-
day. But the weather conditions were
much better at the beginning of today $
session than they were at the close of yes
terday, and this circumstance, agreea BILE
though it was TO the senators, personally,
was not conducive to early action. No
one was prepared yesterday to speak on
any phase of the question, and only early
adjournment prevented vote at that
~ a
ber much improved physically by the
cooling breezes and a nights rest.
There was still some talk of the post
ponement of the entire income tax Ques-
tion until next session ari the fact de-
veloped that yesterday Senator William
Alden Smith had undertaken to poll the
Senate in the interest of such a prop
ositfon. When, however. the Senate met
| today he was not in his seat. He had
left the city. and If he made a poll had
taken it with him. Consequently his
supporters on that proposition were
somewhat up in the air." They were
therefore, inclined to stand out against
vote until they could hear from him
or until they could look into the sub
ject for themselves.
Wording Criticised as Vague.
A stir was created this morning by
Senator Hepburn OF Idaho, who is al
ways on the lookout for legal difficulties.
He asked Mr.. Aldrch and the other
members of the committee. and also
Senator Root of New York. the COM
mittee's legal adviser in thise case. to
examine the wording of the amendment
very. carefully to see whether it would
stand in the Supreme Court. Mr.. Hey
burn did not think it would.
1T will go down in the Supreme
Court" announced the senator from
Idaho, like a SNOWFALL in the sunshine .
was serious enough to engage the atten-
ton of all the lawyers present in the Sen
ate, and at once complicated discussion
arose and legal terms were banded back
and forth in bewildering prOfusion.
Mr.. Heyburn's contention was that the
words with respect to the carrying on
or doing business by such corporations
were vague and meant nothing at all
They were not the right sort of words to
put into any law. he held.
Opposed to Court Decisions.
Furthermore, lie charged that In laying
the proposed tax on the net income from
capital invested Congress would be fly
ing directly in face of the adverse de-
cision Of the Supreme Court on the In
come tax rendered in the famous Pol
lock case in 1904. Many corporations, he
explained. exist merely for the purpose
of holding real estate and have no other
business. A tax on their capital invested
would be a tax on their rentals he de-
clared, which the court had held to be
exactly the same as tax on the real es-
tate itself. and therefore direct" tax
within the meaning of the Constitution
and null and void unless apportioned
among the. various states, which every
body admits is entirely impracticable
When Mr.. Hepburn had stated his OBJ
lection, his colleague, Senator Borah,
who is an earnest opponent of the cor
poration tax declared that the commit
tee had Gaade the language of the
it had found it practically impossible
to draft any definite language that
would not conflict with decisions Of the
Supreme Cour,.
Senator Root Explains
Senator Root was drawn into the de-
bate by Senator Brandegee of Connecti-
cut who asked the New York senator
whether he could not tell just what
was meant by the words with respect
to the carrying on or doing business .
whether it was meant to tax the right
to do business or some, thing else. Mr..
Root replied that 1t was undoubtedly a
tax on the right to do business, but
probably on some other things, too. but
he was not prepared to state just what
at that moment.
When this matter gets into the SUI
preme Court" declared Mr., Brandegee,
1.-The record of this debate ought not to
show that we didn't know what we
meant to do
Mr.. Root contended that the words
with respect to- were the same as those
used by the court in its decision in the
Pollock case in describing what would be
a constitutional act. and therefore he
thought they ought to remain in the
amendment although he suggested that
the finance committee might do well to
keep an open mind and examine carefully
the objection of Mr.. Hepburn.
To this Mr. Brandegee responded that
the court in using those words was not
making law. but was speaking in gen.
eraI language. He claimed that the
court had never intended to say, Use
these words and the law will be constitu-
tional.''
Contention of Senator Cummins.
Senator Cummins of Iowa, another
strenuous opponent of the committee s
proposal, tried to show that if the con-
tention of MIR. Root and the committee
was we'll taken and the corporation tax