Omaha daily bee., 1913-12-12
CASE FILED BY AN ACTRESS
Woman Living in France Sues a
Bank at Chicago.
WITHHELD TAX ON DIVIDENDS
Complaint Alleges that Law is I'm
constitutional.
BoURKE COCHRAN ATTORNEY
New York Lawyer Argues that Tax
IL Unconstitutional Because
Scale f. Not Higher on
the Larger Incomes.

CHICAGO, Dec. 1.-THE suit to test the
income tax law was thrown out Of the
United States district court here today
by Judge lands, who decided that he
had not Jurisdiction. The effect OF his
decision, which does not involve the con-
stitutionality or nconstitutionality Of
the law, is to send the case direct to the
supreme court Of the United States.
The medium selected for the attack on
validity of the law Is a suit in which
Elsie DeWolfe. the former actress, a
citizen of New York, now resident at
Versailles, France, is plaintiff. and the
Continental and Commercial Trust and
Savings bank of Chicago is defendant
w. Bourke Cochran of New York and
Colin C. II. Fyffe of Chicago. appeared
for Miss Dewolfe and Levy Mayer OF
Chicago for the bank.
says Law f. InequitabIe.
Miss DeWolfe. owner of thirty 5 per
cent bonds OF the Appalachian Power
company, was refused payment OF interest
due on the bonds December last by the
bank because she had not filed a certi-
ficate OF ownership which the bank
claims Is required by the income tax
law. Her suit is for interest and dam
ages IN the sum OF Al,OOO.
In the presentation of his case Attorney
Cochran asserted that the law taxes only
$4,000 persons out of a population of
so,0oO.ooc, which tax. he said. was imposed
on them without their consent by the
untaxed remainder OF the population
Even IL congress has the right to i'm
pose this tax the lawyer said II was
graded with such gross inequalities as to
violate the constitution.
Ills clients income, he said, was more
than $4,000 n year, on which she is taxed
l per cent on all above 5000, and an ad-
ditional tax of per cent on all in ex-
cess OF $4,000 He asserted that II this
ratio were equitably pursued the govern
ment's income from the tax would be
Ns75G0oo,O0o. sum practically sufficient 70
deffay all government expenses BY It's
present .nequaiitiee. ne added; the Income
wotd not be much more than $50, 1000.
suit Against Bank.
Attorney Cochran insisted that IL all
incomes were taxed in the same ratio as
that OF the plaintiff, those OF more than
sa5O,0oo would be subject to penalty of
10 per cent instead OF the present per
cent; those Of $4,000 or more to a penalty
Of 20 per cent instead OF 6; Incomes Of
sifVRVV Woulu pe penallZcu " per cent
instead OF Z. A man with an income of
more than s2.50o,oOo a year-and the
lawyer said there were several in the
country-would be assessed 100 per cent.
or. in other words, would have to pay all
in excess of s2,5OO,oOO into the United
states treasury.
Thus. lie argued, his client was not
granted the equal protection of the law
guaranteed by the fourteenth amend
ment to the constitution.
Mr.. Mayer stated the position of the
bank as that the law Is constitutional.
In his demurrer filed yesterday he further
contended the bonds constitute a civil
contract in no wise involving federal
laws. and that the federal court there
fore had no jurisdiction.
The question of jurisdiction occupied
counsel all forenoon after the points spe-
officially at issue had been stated. The
case will go directly to the supreme court
OF the United States from the district
court,
JurisdictiOn is Only Issue.
WASHINGTON, Dec. Reconsideration
OF the case by the supreme court OF the
(Continued on Page Two.)