The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1911-01-18
VERMONT CASE ARGUED
Test Of the constitutionaIty Of the
Corporation Tax

Washington, Jan. 1S.-The argu-
ments in the so-called Vermont case
testing the constitutlonality of the
corporation tax law were heard in
supreme court Of the United States
yesterday.
A woman began the fight on the
constitutionality Of the corporation
tax imposed by provisions of the
Payne-Aldrich tariff act of 1909.
Even before the time, when the
law went in effect, Stella p. Flint as
general guardian Of the property of
Samuel n. Stone Jr, miner and
owner of stock in the Stone Tracy
company doing a general merchand-
Use business at Windsor, VT, started
proceedings to test the constitution
atty of the law. She protested
against the Stone Tracy Co, making
the return and praying the tax, be-
cause, she claimed that the law was
unconstitutional The circuit court
of the United States for the district
OF Vermont could not take that view
of the law, and hence directed that
her petition be dismissed. She ap-
pealed to the Supreme court.
The course pursued in the Vermont
case, was followed in IL other suits
brought in almost as many circuit
courts In all, the law was upheld,
but without extended consideration.
The theory was that the Supreme
court would conduct an investigation
into the consttutonality of the law
and that the conclusions of the lower
court would conduct an investigation
would delay the final determination.
The major part of these cases were
argued before the Supreme court last
March, but all were restored to the
docket for reargument before a full
bench.
The legal contest is centered large
ly over the consideration of few
words in the extended provisions, rel
ating to the tax. The words are
these:
THAT every corporation, joint stock
company or association, organized for
profit and having a capital stock re-
presented by shares, and every in
surance company shall be
subject to pay annually a special ex
else tax with respect to the carrying
on or doing business by such corpor
alton. joint stock company or associa
ton or insurance company, equiva
lent TO one per centum upon the en-
tire net income over and above 5000
received by il from al sources during
such year, exclusive of amounts re
ceived by II as dividends upon stock
of other corporations, joint stock CON
panles or associations or Insurance
companies, subject to the tax hereby
imposed"
These words would bring $4,000,
600 annually into the federal treasury
The law was attacked In the first
argument before the court from vari
lous points of view. Maxwell Evarts
of Vermont laid stress on the point
that the law was unconstitutional be
cause II invaded the sovereignty Of
the state by laying burdens upon The
corporate franchise granted by n state
To a corporation. Former Senator
Foraker of Ohio, contonded that des
pite the name given to the tax thai
il wasa corporation income tax suol
as were pronounced unconsttutiona
by the decision of the court tifteei
years ago. Beside these two con
dieting arguments many others have
been advanced by the long list o
counsel engaged in the various ca
ses.
The government insisted that tn,
law was Just what It said It was oil
It's face.-an excise tax assessed upol
doing business rather than OF
franchises" and not upon income
but merely measured by income.