Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1911-03-14
Supreme Judges Unanimous
in Unfolding the Legality
Of This Feature of Payne
Aldrich Tariff Law.
FIFTEEN CASES ARE
BROUGHT AGAINST 1T
Decision Of Court Arouse on
Objections to Tax Coming
From Various Parts of
the Country.

Washington, March 13.-The corpor-
alton tax provisions of the Payne
Aldrich tariff act were sustained to-
day as constitutional by the supreme
court of the United States.
The court was unanimous in the cor
poration tax decision. There source
of revenue approximately $25,O00, 900
annually was assured the government.
OF all the objections to the tax
raised by suits in all parts of the
country none of them were found suf-
ficient to nullify the law. The court
did not hold that the tax was not ap.
plicable to the real estate trust" OF
Boston which was organized not under
any statutes, but under the common
law.
The law was held not applicable to
estate concern, on the ground that it
was not "doing business" within the
meaning Of the law:
Taft Wrote First Draft.
The fight against, the, constitution
atty of the. corporation tax began al
most Immediately after the enaetnent
of the Payne-Aldrich tariff la,, Of 1909,
OF which it is a part. During the long
days OF wrangling in congress over
that measure, President Taft originat-
Ell plan to raise part OF the revenue
necessary for the running of the gov
ernment by imposing corporation
80 II &C. ~ do Avsof
rough draft of the proposed law and to
have asked the department Of Justice
to perfect it.
Scarcely fifteen years before, the su-
preme court Of the United States had
declared unconstitutional the income
tax measure enacted by congress. In
order. to have a valid tax, the errors
Of that law had to be avoided. Finally
the attention of members of the house
and senate were called to the rro-
posed corporation tax as constitu-
tional measure. It was urged as pre-
ferable to another income tax which,
it was argued, probably would be de-
clared unconstitutional and 'as under
the circumstances better legislation
than an inheritance tax When the
tariff bill was in the senate, lie cor
poration tax provisions were insert
rs an amendment to the Payne bill
passed by the house. They remained
there and became part of the tariff
act.
Provisions Of the Law.
The provisions of the law stated
that the tax was a special excise
tax with respect to the carrying on or
doing business It was to be paid
by every corporation, joint stock
company or association, organized for
profit and having capital stock repre-
scented by shares, and every insurance
company, organized under the>laws OF
the United States or of any state or
territory. 1t was provided that the
tax should be equivalent to one per
centum upon the entire net income
over and above $4,000 received from
all sources" exclusive of amounts re-
other corporations, joint stock COM
panies, or associations, or insurance
companies, subject to the tax.
The law provided also that returns
should be made by those taxed to the
treasury department, to be used as
basis for assessing the tax. These.
were open to inspection, but in 1910
congress enacted lesiglation provid-
ing that the returns should be open to
inspection only upon rules and regu-
lations approved by the president.
The first action in the courts to test
the constitutionality Of the law was be-
gun in the United States circuit court
for the district of Vermont. A woman
began It, Stella P. Flint. guardian OF
the property Of Samuel N. Stone, Jr.,
stockholder in the Stone Tracy COM
pany, of Windsor, VT, began an action
to have the company restrained from
paying the tax. She claimed that the
tax was unconstitutional. Her attor-
ney, Maxwell Evarts, brought the case
to the supreme court, after the circuit
court had declined to hold the tax
unconstitutional.
When the Stone Tracy case came up
for argument before the supreme
court in March, 1915, fourteen other
cases likewise raising the validity OF
the law and decisions likewise sus-
tanning the constitutfonality of the
tax. had reached the court. They
were advanced and heard with the
original case, Because presumably OF
vacancies on the bench, the cases were
restored 20 the docket for reargument.
(Ces sued on Page So