The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1910-01-20
TO TEST CORPORATION TAX.
Case To BE Heard I'm Brattleb0r0
Before Judge Martin.


Brattleboro Jan. 1S.-Stella P.
Flint of Windsor as general guardian
of the property of Samuel ~ Stone
Jr, minor, has brought a bill in
equity in the United States Circuit
Court before Judge ]. l.. Martin
against the Stone Tracy Company
Frank B. Tracy, Ida S. Tracy and
l.. B. Hayward, directors of the COM
pany, also of Windsor.
The case will test the constitution
ality of the corporation tax law pass
ed by Congress and approved by the
President August 8, 1909. 1t will
be heard in Brattleboro on Thursday
before Judge Martin.
The bill of complaint sets forth
that the Stone Tracy Company is a
corporation created and chartered by
the State Of Vermont and that It's
principal place of business is Wind
sor. Under its charter the defendant
corporation has been carrying on a
retail mercantile business. The bill
further alleges that under the provis-
ions of the corporation tax law it be-
came necessary for the firm to file
statements of the Indebtedness of the
corporation and give information as
to all departments of its business
and pay a tax of one per cent upon
the entire act income over $4,000.
The bill states that the orator
further believes that the provisions
of the tax on corporations requiring
the filing of such information are
null and void and the requirements
to pay the tax arc burdens upon the
charter grant I'd by the State of Yer
mont and are a tax upon a function
of sovereignty belonging to the STATE
of Vermont, which was never agreed
to either expressly or by invocation
by the State or by the people when
Vermont was admitted as a State in
to the Union.
1t is alleged that the said acts of
Congress are IN violation of the fifth
amendment to the Constitution, es
under the provisions of the law the
defendant corporation will be depriv-
ed of its property. through publicity
of it's business the privacy of it's az
fairs will oe largely destroyed and
its chief competitor and all other
persons will be ehle to gain an inti-
mate knowledge of it's affairs and lis
trade secrets. and the assessment If
made will be laid upon the defendant
corporation and not upon its chief
competitor.
1t is alleged thai the provisions OF
the act are unconstitutional In that
the private property of the defendant
corporation will be taken, that il is
a violation Of the fourth amendment
to the constitution and violates the
right of the defendant corporation 10
be secure in its records against un-
reasonable search and seizure, and
are burdens 10 the charter and fran
chise covered by the State Of Yer.
mont.
1t is further alleged that the acy
is violation of the tenth amendment
to the Constitution in that the re-
quireme nts are tax upon and an H.
terference with The powers of the
State of Vermont and other States
expressly reserved to grant charters
1t is also a violation of the constitu-
lion because the sO-called special ey-
else tax is in reality a direct tax up.
on charter and franchise of the de-
tendant corporation and upon all
other corporations, and it is not ap-
portioned among the several States
according to their population as re
quired by the constitution, it is al
legged.
1t is asked that the provisions Of
the act of Congress be decided as
unconstitutional and that the defend
ant be restrained from voluntarily
complying with the provisions of the
said act.