El Paso herald. (El Paso, Tex.) 1901-1931, 1913-05-17
TAX
ONCE HELD
Invalid
Amendment to Constitution
NeceSsitated by Ruling of
Supreme Court in 1894.
JURISTS CONSIDERED
1T TO BE DIRECT TAX

Ew TAsHINGTON. d. c, May IL
/ M Perhaps no decision ever rem
/ dered by d federal court in
/ the United States tended to shake the
/ faith of the people in the courts more
/ than the decision of the supreme court
! that the income tax law Of 1904 was
/ unconstitutional. Having the misfor-
! tune to reverse the construction and
/ practice of q hundred years. coupled
with a practical reversal Of it's own
/ first decision, the court, however right
| eOuS its aims or high its purposes
| might have brought down upon itself
! storm of adverse and distrustful
Contested by Zig Interests.
As soon as the law OF 1894 went
I into effect all of the big interests Of
the country got ready to fight it. on
the ground that il was unconsututiOn-
, al. Many suits were brought contest
| ing it, but the one which finally had
/ the honor of being the test case was
that of Pollock vs.. The Farmers Loan
I and Trust company. Some of the ablest
! lawyers at the American bar were
! brought in to attack the constitution
alIty of the law Few cases In that
} court ever have been more thoroughly
argued or eXpounded than was this
/ one, the arguments and briefs filling
I several volumes.
There were two principal grounds
upon which the opponents of the tax
I declared il ncOustitUtiOnal-that II
/ was not a uniform tax, and that II was
Z a direct tax. They laid more emphasis
! on the former than on the latter as
I SertOn- They attempted 10 persuade
the supreme court that il should pro-
Z nOunCe the tax unconstitutional With
+ out reversing the former decisions OF
: that body. The court paid little atten-
: ton TO the argument that the tax was
: not uniform one within the meaning
/ of the constitution, and indeed, in
/ later decision. the governments con-
I tentiOn in this particular was upheld
Not Direct Tax in 1870.
The court had declared by unani-
nous vote in 1870, in the case Of
! Springer against the United States, IN
which Springer resisted the payment
; of tax upon his professional income,
that 1T does not appear that any tax
like the one here in question was ever
regarded or treated by congress as
I direct tax. This uniform practical
I construction Of the constitution touch
inc so important 4 point is a cOnsid-
GRAFTON of great weight 1t further
] added that our conclusions are that
direct taxes. within the meaning Of
: the constitution. are only capitation
taxes as expressed in mat instrument,
I and taxes on real estate. 1t turtner
! declared that the tax upon SprinSer's
, income was in the nature of an excise
or duty, and, therefore, not a direct
tax
Income From Land, a Direct Tax.
Unfortunately the income Of Spring
er was not derived from lands, but
rather from United States bonds and
professional earnings When the law
of 1894 came before the supreme court
counsel argued that income from land
cannot be distinguished from land it
self and, therefore. If a tax on land IS
a direct tax. as every one comedies II
. follows that a tax on an income de-
rived from land is also a direct tax.
d re -crrF 81 O
in the first case that tax upon IN
come derived from lands was a direct
tax. and therefore, inhibited. by the
constitution except under appOrton-
No Taxes state Bonds.
There was an even division OF the
court upon the question of whether
the remainder Of the law should be de-
clared unconstitutional because this
part Of it was so held. There was one
phase of the controversy, however
upon which the court was unanimous
and that was in declaring that the
part of the law which put a tax upon
Incomes derived from state bonds was
unconstitutional, not because II was q
direct tax. but because the federaI
government had no right to tax the III
strumentanties of a state.
OF course such a decision tore the
income tax law to pieces, and there
seemed no other way out OF the ulLL-
Guilty than to reopen the whole matter
and to argue it all over again Counsel
opposed to the law built their argu-
ments upon the opinions of the court
in the first case. and declared that H.
as the court had held, a tax upon in
come derived from land were direct
tax, then also a tax upon the income
from personal property would be a d.
rect tax
Vote Changed on Rehenring.
Justice Jackson had not participated
in the hearing of the first case, and
arose from what proved to be ms
deathbed to hear the arguments on the
rehearinC. He voted in favor Of the
constitutfonaIitv of the law, and
since the vote had stood four TO -FOUR
on the first hearing, his vote IN 1aNor
of the law must have made II consul
/ tutiOnal. had not one of the Justices
affirming the cOnstitutionallty OF cne
law in the first case changed MS vote
ana registered himself against It, Who
that Justice was is not known FOR
long time il was claimed that II was
Justice Shiras. but more recently claims
I were made that it was not he, but JUS
tice Brown. Others assert that II was
4 Justice Field. Probably 1t VIII never
( be known. But at any rate, one man
who on the first hearing had voted 10
uphold the law changed his mind and
voted against it on the rehearlng-
Investigation Not Complete.
Many careful authorities assert lhdI
the court did not take time to make
its own Investigations. and, therefore,
relying upon the representations "I
counsel il was graVely mlsleu, anu
that this fact is disclosed by an eX-
animation of the affirmative opinions
For instance it was argued that
Frenchman by the name Of Turgot had
written a pamphlet on taxation IN
which he pronounced an income tax
direct tax. and that this work was IN
the hands of the trainers of the consu-
! tuition. Chief Justice Fuller accepted
this and used it as an argument IN ms
oDiDion Professor SeliEman, OF
Columbia university, shows that, no
such work ever was published IN
France much less translated in the
United states TurgOt did write Ut
tie memoir in which he cOntended that
the only direct taxes were poll taxes
and land taxes
Again. it was contended by counsel
ID adnntad in the opinions of the