The Salt Lake herald-Republican. [volume] (Salt Lake City, Utah) 1909-1918, 1910-03-27
PECULIAR FEATURES Of
Fight ON CORPORATION TAX
GOVERNMENT MADE /
PARTY TO SUIT.
Not Named as One of the De-
PENDANTS, but Really the
Only One.
VERY COMPLEX AFFAIR
EXPLANATION GIVEN AT DE-
PARTMENT OF JUSTICE.

PARTMENT OF JUSTICE.
Washington March ga peculiar
situation developed in the supreme
court of the United States when the
government through Solicitor General
Lloyd w. Bowers, filed it's brief in the
corporation tax cases which are now
pending before that body for final con-
sideration. Although it was filed in
strict conformity with legal procedure, 1t
has nevertheless been the source of
general comment in legal circles
throughout the country, particularly
among members of the bar of the SUI
preme court of the United States, who
are generally familiar with the prac-
tice obtaining before the tribunal, as to
just what position the United States
government occupies in the litigation.
This situation was brought about by
the appeal of a number of corporations
from various circuit courts to the Unit
ed States supreme court under the re-
cent act of Congress, which levied a
tax of ! per cent on the net incomes of
corporations. The act contemplated
the payment Of the revenue taxes by
March 1 last, and specifically stated
that corporations not complying with
III - SAACttso NC lAA4Au AAOb iAiOAC lAAeAsi
$4,000.
Grounds of Opposition.
Internal Revenue Commissioner Ca
bell of the treasury department was
designated as the officer to collect the
tax through local revenue collectors. 1t
was also provided that this officer
should have discretionary powers in
imposing the fines on recalcitrant cor
porations. To further protect the Of
ficers in collecting the tax the law
states that suits of injunction or jul
dtcial restraining orders could not be
served on collectors of taxes. Hence
the general opposition of corporations
TO the payment of the tax, and also the
avidity with which it was paid by all
of the corpora lions in a little less than
one months time.
Although the tax, il is thought, was
paid by all of the corporations, certain
large stock companies resorted to the
courts to test the validity of the legis-
lation and to endeavor, if possible, to
escape subsequent levies. Already if
teen cases have been placed on the
docket of the supreme court of the
United States, and for the purpose of
facilitating the adjudication of the
points involved were consolidated so
that they could be heard as one case.
TatNOAd AAAE W AilG NdlClAUdI TIE eases
were presented to the court on March
II, when arguments were made by the
respective sides. The governments
brief, which was presented by Solicitor
General Bowers, consisted of more than
800 pages of printed matter.
Case Very Complex.
The situation presented by the filing
of this brief shows that the govern
-
is absolutely nothing in the cases in
dicating that it is one of the many de-
PENDANTS in the suits. Necessarily,
when a case of this sort is presented
to the supreme court of the United
States the government must defend the
law. 1t did so. of course. but without
being named as a party to the suit. As
il stands the suit involves a dispute be-
tween individuals and corporations.
Yet this unusual state of affairs is
just little more complex than this.
The individuals, who are suing the cor
porations, are themselves stockholders
in the corporations. They asked that
the courts restrain the corporations
from paying a tax imposed by the fed
eral government which the corpora
tiOns could not refuse to pay, as the
statute under which tho tax is collect
ed does not permit the corporation any
alternative, nor could ii bring a suit
against the United States by making
the collector of taxes the defendant.
Just TO make things a little more in
teresting and bewildering to the lay
mind, an attorney of New York, rep
resenting a large corporation. entered
his appearance in the case in behalf of
the corporation. AT the same time
however, he takes issue with the gem
eral points involved on the sides of
other corporations and threw his ar
gument with that of the United States.
The case, as it stood, involved more
than thirty lawyers, each of whom
wished to be heard in support of sew
eral arguments which had been ad-
vanced. As the time was limited by
the court TO two days. it was obviously
impossible for each and every attorney
TO present his respective case TO the
bench.
Situation as Explained.
The explanation given at the depart
ment of justice for the peculiar turn
that affairs took was almost as cOmpli-
Gated as the situation which presented
itself before the supreme court, al
though its judicial aspect was never
criticised or questioned by any member
of that bar familiar with the course of
the corporation tax litigation.
III TIC HIGA H4ctINH the 0Hlleu states
government was the party most inter-
ested in the several suits, by reason of
the fact that an act of congress in
volving the Interpretation of the con-
stitutiOn was attacked. Second that
suits could not DE directed against the
United States, because of the fact that
the law specially charged that suits
could not be brought against the gov
eminent agents for the purpose of de-
laying the collection of the taxes, and
third, that by this situation, the United
States government was barred from
defending these suits IN a direct man /
ner. but had to make an attempt under /
the constitution itself to defend any
suit brought which attacked or tended /
TO impair the validity of the constitu-
ton in when they were even indirectly
interested. Thus, in judicial parlance. /
the government was trying to do in an !
indirect manner what 1t could not do |
in direct manner. and. of course, in |
law, it was necessarily doing an unlaw-
full act.
Respected by the Court.
It is not for the purpose Of procedure.
however, that the United States gov |
eminent, simply by the introduction of /
it's brief in the case in which ii is vital /
~ affected, was trying to do an I'M
lawful ACT III attempting 10 become z I
party 10 the suit. Its stand In this re-
spect was thoroughly appreciated by
the court and its right of appearance
respected. II could have neglected Of
ficialiy to appear in the case for the /
reason that the arguments presented /
by those who defended the actions in
the lower courts were practically the
same a. were advanced by the govern