Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1910-05-31
United States Supreme Court
Takes Same Action as in
Tobacco Suit.
PRESIDENT TAFT SPONSOR
OF LEVY THUS HELD UP
Many Separate Actions Depend
on Final Decisi0n-Rehear-
ing Early in Next Term.


preme Court of the United States to-
day set the corporation tax cases for
reargument at the beginning of the
next term, before a full bench
President Taft is regarded as the
father of the corporation tax idea as
represented in this statute. He evolved
it during the discussion of tariff legis-
lation and income and Inheritance
taxes in 190S-1909. AS a result, Con-
gress inserted the Corporation tax
law into the Payne-Aldrich tariff act
passed by Congress last summer. 1t
became section SO of that statute.
Exempted Societies.
The law subjected to the tax in a
general way every corporation, joint
stock company, or association, or
stock represented by shares. and every
insurance company. The tax was desig-
mated as "a special excise tax with
respect to the carrying on or doing
business" and it was provided that it
should be equivalent to 1 percentum
upon the entire net income" over and
above $1,000 received from all sources
during the year.
There were to be excluded from the
income, however, amounts received as
dividends upon stock of other organi-
cations, subjected to the tax. Exempt
ed from the tax were certain organi-
cations. such as labor, agricultural,
horticultural and fraternal beneficiary
societies.
One paragraph Of the law provided
for the publicity of the returns re-
quired as basis Of fixing the tax.
The tax was to be paid on or before
June 80 of each year and the returns
for each year were to be made by
March l. 1t was provided that the
June 30, 1910, although the law was not
passed until August 5, 1909.
Not until shortly before the expira-
tion Of the time for the making Of the
returns was the first move made to
test the validity of the tax. This move
ment to test the great question about
corporation law started in the little
town of Windsor VT.
Rival Stores Inspired Test.
| There Maxwell Evarts. New York
| lawyer, son of the late William M.
Evarts, has summer home. He had
often noticed the keen competition be-
tween the two general merchandise
stores In the town, the Stone Tracy
| Company, corporation, and Dwight
Tuxbury & Sons, partnership concern.
He saw what he believed was a dis
| elimination against the corporation if
| 1t were compelled to pay the tax and
make public it's business arrangements,
and so accepted the position of counsel
for Stella P. Flint, as general guardian
of the property for Samuel N. Stone, jr.,
a minor, who owned stock in the Stone-
Tracy Company.
Suit was brought in the Federal court
by Mr.. Evarts to enjoin the corpora
tion from making the returns and pay
ing the tax on the ground that the law
was unconstitutional. The corporation
filed a demurrer which was sustained
and the bill dismissed. An appeal was
taken to the Supreme Court.
The institution of the Flint-Stone
Tracy case was the signal for the
bringing of suits in many sections of
the United States. All were decided
in exactly the same way, and almost
invariably appeals were taken to the
Supreme Court. The government was
allowed to intervene. Fifteen cases,
headed by the Flint Stone Tracy suit,
were set for argument on March IA.