Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1916-01-24

Washington, Jan. 24.-The supreme
court today upheld the constitutionaiity
of the income tax law.
Chief Justice White gave the courts
decision, sweeping aside all the many
objections to it's constitutionality in
whole or in part.
Chief Justice White announced the
decision in the case of Frank r.. Brush
aber, stakeholder of the Union Pacific
Railroad, who sought to enjoin the
company from paying the tax on the
ground that it was unconstitutional.
Most of Judge Whites opinion was
directed toward overruling the conten-
ton that the income tax amendment
provided a hitherto unknown power Of
taxation. Going far into the history Of
income tax legislation, the chief justice
concluded that the argument was with
out merit.
Five separate suits to test the con-
stitutionality OF the new income tax
were brought in the federal courts -
out the country soon after the law be-
came effective and all found their way
to the supreme court of the United
States soon after.
For nearly fifty years the fight for
and against federal income tax has
been somewhere in the courts.
The income tax imposed during the
civil war and the years Immediately
following were not attacked with the
seriousness of later cases. 1t was not
until the Cleveland administration
placed an income tax in the Wilson
tariff sact that the fight became ser
ious.
The. contest over the validity Of the
tax in 1894 ana 1896 before the supreme
court was one of the most bitter ever
fought out before that court. One of
the lawyers, James G. Carter, warned
the court against setting up Its judg-
ment to tnwart the will of 60,Oo0,O00
people. Joseph H. Choate. opposing,
called upon the court to exercise its
judicial power regardless of any popu-
lar or populistic propaganda.
Jurist Suddenly Changes Mind.
At first the court decided that the
tax was unconstitutional as to rents
from land because it was direct tax
not apportioned according to popula-
ton, and was unconstitutional as to in
terest on municipal bonds. Only eight
judges participated and they were ev-
enly divided as to the validity of other
features of the law. A rehearing was
granted and Justice Jackson, then dy-
ing, took his place on the bench to lis
ten to the last arguments In his lifetime.
Justice Jackson voted to sustain the
law. Justice Harlan created a sensa-
ton by announcing from the bench that
another Justice had changed his mind
over night on the question. and the en-
tire tax, both as to realty and as to
income from personality, was set aside
on the ground that it was direct tax
and not appcrtioned according to pop
ulation as required by the constitu-
ton of direct taxes.
An agitation for an amendment to
the constitution then began. 1t came
to nothing until President Taft recon-
mended the enactment of an excise tax
on corporations to be measured by
their income and an amendment to the
constitution to permit the levying Of an
income tax on Ell income. The amend
ment was submitted to the states at
once and was proclaimed as the six
teenth amendment to the constitution
on March /, 1913.
1t provided:
"The congress shall have power to
LAY and collect taxes on incomes from
whatever source derived without ap-
portionment among the several states
and without regard to any census or
enumeration"
Five Suits Are Instituted.
Congress availed itself of the first
opportunity to exercise the new power
by Incorporating into the tariff act
which become effective Oct. 1913, the
present income tax. Five suits, all
challenging the validity Of certain
features Of the tax were:
Frank r. Brushaber, stockholder of
the Union Pacific Railroad Company,
seeking in the Now York federal courts,
to enjoin the company from paying the
tax.
John F. Dodge and Horace F.. Dodge,
manufacturers OF Detroit. Mich. in the
Michigan federal courts, to enjoin the
internal revenue collector from coll
lecting the tax. largely on the ground
that it discriminated against CO.
partnerships in favor OF corporations.
-. 9
John r. Stanton, stockholder of the
Baltic Mining Company, in the Massa-
chusetts federal courts, to enjoin the
company and others from paying the
tax, largely because Of the per cent
annual deduction from income allowed
mining companies for ore depletion.
Tyee Realty Company, In the New
York federal court. to enjoin the COL
lactor of Internal revenue 6.
Edwin Thorne, In the New York fed
eral court, to enjoin the, collectors,
largely on the ground that the addi-
tional or surtax imposed on incomes
over $4,000 was unconstitutional.
In each instance the lower court heia
the tax constitutional. and the case
was brought to the supreme court on
appeal. The cases were advanced for
L. : I. e