The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1911-03-14

ing the name Of the Company
California Fig Syrup Co.-plainly
printed on the front Of everypackage.
water and the like. Therefore /, was
determined that the coney Island and
Brooklyn Railroad Company and tina
PETERBOROUGH Rapid Transit Company
OF New York are subject to the tax
After dealing at length with numer-
Gus other objections TO the law, Justice
Day came to the attack upon II based
OH the so-calied publicity features OF
the provisions which require certain
returns to be made to the govern meni
as IN aid In the assessment OF tax.
Must Determine Means.
The taxation being, as We have
held" said the justice, within the lie.
| climate powers OF Congress. II is for
that body TO determine what means are
appropriate and adapted to tho pur-
poses Of making the law efcctual'
The opinion thus summarized covers
fifteen OF the eighteen cases in which
assallcd. The nom applica bility Of the
act &c the real estate trusts was de-
cidcd in the other three cases
In these cases the law was held in
applicable to the department store trust
and TO the Gushing real estate trust
both OF Boston, on the ground that tho
trusts were not organized under ths
statutes of the state o. or the United
states. but existed merely under the
common law.
The Minneapolis syndicate was held
not liable TO the tax. because the real
estate which Il held before recent
reorganization had gone out of it's con
troll. and therefore the syndicate VA,
not doing business within the mean
inE Of the law.
Fight Starts Early
The fight against the constitu,ionality
CT the corporation tax began almost
Immediately after the enactment Of this
Paync-Aldrich tariff law OF 1909. OF
which IT is part. During the long
days of wrangling in Congress over
that measure. President Taft originated
plan to raise part of the revenue nee
essary for the running of the govern
ment by imposing corporation tax
fie Is said to have made the first rough
draft OF the proposed law and to have
asked the Department OF Justice TO per
feet It.
Scarcely ffteen years before the SUI
| premc Court Of the United States had
declared unconstitutional the income
tax measure enacted BY Congress. In
ORDER 10 have valid tax, the errors of
that law had TO be avoided. Finally
The attention of members Of the House
and Senate was called to the proposed
corporation tax as constitutional
measure. 1t was urged as preferable to
another income tax. which. II was arr
gued, probably would be declared nn-
constitutional. and as. under the cir
cun.stances better legislation than an
inheritance tax.
When the tariff bill was In the Sen
1,
inserted as an amendment 10 the Payne
bill passed by the House. They re-
manned there and became a part OF the
tariff act.
The provisions Of the law stated that
the tax was special excise tax with
business. IT was to he paid by every
corporation, joint stock company or
ass ciation. organized for profit and
having capital stock represented by
shares. and every insurance company
organized under the laws Of the United
States or Of any state or Territory,
be equivalent to per centum upon
the entire net Income over and above
$4,000 received from all sources" ex-
elusive OF amounts received as dvi-
tons. Joint stock companies or asso-
Citations. or insurance companies sub
ject to tho tax
The law provided also that return,
should be made ny those taxed to the
Treasury DEPARTMENT 70 he used as a
we're open to inspection, but in 1910
! Congress enacted Legislation providing
that the returns should be open to
lions approved by the President
The first action in the courts 70 test
the constttutionaity of the law was
Court for the District Of Vermont 4
woman began it. Stella p. Flint guar
dian OF the property of Samuel y.
Stons IT, IT,, stockholder in the stone
gan ar action to have the company
restrained from paying the tax. She
claimed that the tax was unconstitu-
tionaI; Her attorney; Maxwell Evarts.
brought the case to the Supreme Court.
after the Circuit Court had declined to
hold the tax unconstitutional.
for argument before the Supreme Court
in March. 1910. fourteen other cases.
likewise raising the validity OF tho
i ann ike e sstaninS
reached the court They were ad-
vanccd and heard with the original
case Because presumably, OF vacan-
stored to the docket for rcarEument.
This reargument occurred in January,
1911. -
The constitntionality Of tho tax was
attacked from all points from which
any tax possible Of enactment by Con
SreSS could be attacked Prominent
among the objections to the law was
the argument that the tax was a d.
rect ,ax. not apportioned according
to the Constitution. Some dubbed the
tax "a corporation income tan" and
invalid for the sa me reasons that the
income tax was declared unconstitu-
tionai in ls95. others claimed that 1t
was tax on State franchises. and
hence was an unconstitutional inter
ference with the sovereignty OF the
States. Another line OF objections was
based on the argument that as an eX-
else tax. 1t was not uniform, but con-
tafned unconstitutional classiflcations.
The publicity features Of tho returns
were attacked as taking private prom
erty without compensation. To all OF
these objections the Department OF
Justice. through the late Solicitor-Ge en-
eral. Lloyd w. Bowers, at the first
hearing and through his successor.
Frederick W. Lehmann. Mt the second
hearing, made answer.
After the argument Of the fifteen
cases the court took up three other
cases involving the tax. In these the