The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1914-06-25
To Investigate Riots
WILL FIGHT TO END
AGAINST PROPOSED
TAX ASSESSMENTS


accounts which are regarded as reason-
ably sure of collection.
Robert G. Thach, well known Biz
mingham lawyer, who has prepared an
opinion for several clients in connection
with the move of Capt. j. V. Allen, gave
out a statement last night In which he
says the merchants of Birmingham have
an excellent chance of winning their fight.
Mr. Thach said, in that the Board of
Trade was going to fight the case, he had
advised his clients to step down and
permit the civic body to carry the case
to the supreme court.
Thach Issues Statement
The statement of Mr.. Thach follows.
1.-THE section of the Alabama taxation
statutes upon which Tax Commissioner
J. V. Allen is attempting to tax the mer-
chants and other business concerns in
Birmingham upon their solvent credits
for the current year as well as for five
preceding years, is the following subdi-
vision of section 20S2 of the Alabama code
of 1907:
All money lent, solvent credits, or
credits of value, except such as are Sc
cured by mortgage deed of trust. or
written contract of conditional sale. upon
which a tax imposed by law has been
paid
This paragraph Is one of series of
descriptions of property subject to taxa
ton In this state.
There was a provision taxing solvent
credits in wording almost similar to the
above In the code of 1896. but the supreme
court of Alabama held In 1906 In the case
of Barnes vs. Moragne, appealed from
the Gadsden city court, that a certain act
passed by the legislature in 1903 imposing
a privilege tax on recorded mortgages and
providing that no other tax could be COL
lected on debts of this kind after such
recording fee was paid operated to repeal
the entire section in the code of 1896 tax
Ing solvent credits of any kind. In its
written decision In the Moragne case, the
supreme court said that IL would be I'M
constitutional to exempt from property
taxation solvent credits secured by re-
corded mortgages and to subject to such
taxation solvent credits not secured by
recorded Instruments
after this decision the legislature In
1907, embodied in the code of Alabama the
present law, as first quoted above. The
constitutionality of this law has never
been tested. and 1t is under Its authority
that Tax Commissioner Allen has notified
some 1900 individuals and corporations in
Jefferson county that they must assess
and pay taxes on their solvent credits
for the years 1909. 1910. 1911, 1912. 1919 and
1914"
Believes Merchants Will Win
II understand that Governor O'Neal
and Attorney General Brickell have
rendered a formal opinion to Mr..
Allen expressing their belief that
the section In question will be held consti-
tutional il tested in the courts, but after
careful reading of the Moragne case.
and after hearing several of the ablest
members of the bar here express their
opinion, 1 think there is serious doubt
about 1t, with the chances favoring the
declaring of the section unconstitutional
1.-The judges were badly divided in the
Moragne case, the vote being four to
three.
'Unquestionably the same discrimina-
ton which the supreme court termed az
unconstitutional In 1906 exists now as II
did then between solvent credits secured
by recorded instruments. and those credits
not SO secured. 1t would seem certain
that one of the two laws must be declared
unconstitutional. unless the supreme cour1
reverses the ruling in the Moragne case
| 1t appears to be simply q question o
which statute will fall.
The question invoices tremendou