Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-03-18

arguments on the constitutionality OF
The corporation tax provisions of the
Payne-Aldrch tariff act. After an
other days argument, the court Will
take the statute under it's consideration
with a view to arriving at decision.
Constitutional lawyers from various
sections of the country took part in
the argument of the day. They We're
connected with the Is cases in which
the validity of the tax is attacked and
which had been consolidated into one
cause for the purpose of the hearing.
In each Of these suits stockholders or
policyholders had brought action to
prevent corporations from paying the
tax Without exception the lower
courts held the tax constitutional and
dismissed the suits. The Home Life
Insurance Co. and the Coney Island
and brooklyn Railroad Co. had coun-
sci present TO Insist that these corpora
lions themselves be required to pay
the tax.
Maxwell .1varts, Of New York opened
the argument. He declared the tax UNI
constitutional, because. as he argued,
it interfercd with the powers of the
state by taxing franchise: it was ar
,bitrary, oppressive and. because Of its
publicity clause. took private property
for public use without compensation
He was followed by Charles II. Will
iiams and Richard r. Rogers, of New
York, and f.. @. Brown of Chicago. who
argued the unconstitutionality of the
law as applied to the various ndiVid-
nal cose. Ex-senator J. r. Foraker Of
Ohio and Richard V. Lndabury, of
New JERSEY addressed the court on
general features of the law. holding it
invalid.
Solicitor General Powers. shortly be-
fore the court adjourned, began his
argument for the government in de-
fence of til" law.
Mr.. FVarts devoted much of his
time to arguing the point of law in
vading the sovereignty of a state. The
invasion o. stat" sovereignty through
the corporation tax is actual and real
he declared. He said the tax was ar
bitrary and "ppre ssive and in viola
ton of tie fifth amendment to the Con-
stitution. His third attack was on the
publicly feature of he law, which he
said had nothing to do with taxation.
When the return Is made and the
tax ascertaincd thereby and possible
tax paid" said Mr. Evarts, "the return
is made a public record open to IN
spection By what power of Congress IS
that done? Perhaps 1t is part of
general scheme of regulation of cor
porations. But ask where is the
power?"
Juatice Iurton wanted to know what
section of the Constitution he claimed
was violated thereby. Mr.. Evarts said
il was that section which prohibited
the taking of private property for pub
lie purposes without compensation.
Richard Reid Rogers in behalf of the
stockholders in the Interborougn Tran
sit Co of New York said the law might
be constitutional as to most corpora
lions and yet invalid as to this cor
poration because the marlborough Co.
is engaged in carrying on state enter
prise. that Of operating subWayS in
New York.
A. O. Brown argued that the law
was unconstitutional as applied to the
Northern Trust Co. and the Corn Ex-
change National Bank OF Chicago,
principally on the ground that the tax
was on bonds exempted from taxation
and on the POWER of a state to author
ize trusts.
Mr. Foraker argued at length the
question Of just what the tax was
laid upon. Unlike Mr.. Evarts, who ar
gued the tax was on the franchise Of a
corporation he commended it was on net
income derived from all sources. On
the publicity feature he was most ve
hement.
Richard V Lindabury, counsel for
stockholders in the Coney Island and
Brooklyn Railroad Co. and the Home
Life Insurance Co, attacked the gov
ernnent's brief as "wipinc away the
foundations If the income tax cases"
Solicitor General Powers began his
argument in defence Of the law about
half an hour before the court adjourn
ed His time was devoted To an en-
deavor to prove that the tax levied on
the carrying on or doing business
and was merely measured by and was
not on met income" He argued that
legislators never would have select
ed net income as 4 measure il the tax
was to he on property rs he said some
OF the opposition had contended.
Fifteen eases involving the question of
the NallultN oil the TAX nave been
brought tn the court for final Judgment
All We're advanced for an early hearing
and consolidated in order to avoid giving
II days TO the subject. In each suit. ex-
cept one. stockholders brought the action
in the lower federal courts in various
sections of the country to cnioin the COR
poration in which they held stock from
paying the tax in conformity with the
law. In the other case. the one against
the New York Life Insurance Co, poll
cyholders brought the suit In each pro-
ceeding the lower court upheld the valid
lily of the law without extended argr-
ments being made on the subject, and
ordered the suits dismissed. Appeals
were taken then to the supreme court
The first suit brought was that by G
woman. Stella p. Flint of Windsor. VT.
as general guardian of the property O
Samuel N. Stone, Jr.. a minor who hold
stock in the Stone Tracey Co, genera
merchandise corporation doing bushes
In Windsor Then followed salts teb
Wickof vanderhosf against the Cone,
- GSasS fAa 81 q 8