The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-03-14
Federal Supreme Court Holds
Tax Must Be Paid by Retail
Stores Owned by Packers
ATTORNEY GENERALS
CLAIM is UPHELD
IN NOTED CONTEST
Other Vital Cases Argued.
Signal Company Issue Grows
Out of Injured Employees
Failure to Recover Damages

While the legislature OF Virginia has
been celebrating and debating over
the questions Of a few hundred thous-
and dollars. more or less. for schools
and roads, and while the entire state
Ia speculating over whether the gov
Srnor Will Gall an extra session OF
the general assembly because OF "a few
salary increases, the attorh ey-geuer-
ais department has In the pursuance
OF the even tenor Of {tA way Just
rad placed on the record Of the su-
prer1e court OF the United States a
decision in the Armour case that in
creases tho raven Faas Of the state from
taxation by approximately <2pN 008 per
year, II is even eatima ed b. reepon-
stbie authorities that the revenue re-
turn may considerably exceed the
larger figure.
Corporation's Legal Responsibility.
In addition to the above the Depart
meHt argued two other cases Of vital
Importance TO Firgtris before the
United states supreme eaurl thts week
The first WAS the case Of he Cen
trail Railway signal company, IN W hich
is involved the aht OF foreign corr
poratlen to transact business In Viz
ginia and escape legal responsibility
Tor suits in damages fer personal tn
jury If employees, or 9uits for any
bfttff EAASF
The second was the case ~ the DaI-
ton Adding Machine company, involv-
ing iseaea similar 20 the Armour case
The contesttnR corporations con-
tended that the Virginia statute is in
violation OF the constitution Of the
United states as applying TO their
business. which fh@y maintained come
under the provisions relsting to inter
state commerce
EmRtsy~ Failed 40 Recover.
Assistant ATTORNEY General J n
Hank msde an exhaustive arGumeai
for the state bringing out many points
leadtrG TO rCDeated .nt"rrO&stioGs 10y
members Of the court
ne fante an tho Central Railway
SiEnai COMPANY case are that in Tbs
period between 1911 and 1914 the com
psny built and installed approximate
~ ~ miles % railway sjsnAls lnciud-
ing the necessary conduitS and con
struction work. The work costing in
the nelghborhood ~ $500 oo
During the latter part Of this work
an employee was injured, and when
hts attorney set oHt 10 sue the com
pany 1t was found that no copy oil
the compaHy-s charter had been filed
with the corporation commission, nc
license obtained and no statutory
agent upon whom notice of suit could
be served had been named. Conse-
auentlv there was no one for the in
3ured enaploye to sue, and ne never did
recover IN damages for hts injury.
When this was discovered the com
pauy was sued for falling to comply
with this statutory provision, aned
ore thousand dollars by the corpora.
tton commission court. which was sus-
tanned by the supreme court of Nir-
sinia and the defendant com pany ap-
pealed to the United States supreme
court.
Sought Exemption From Taxes.
In some respects this case resembles
that of the Armour oompany. which
claimed exemption from certain state
taxes. which was prepared and argued
before the United States supreme
court by Mr. Hank. Taxes were levi I'd
on the Armour company based on the
purchases made by the different dis.
tributinr establishments of that cor.
po~attcn.
Virginias system Of taxation. in.
vuIved in this case embraces two
classes. Manufacturers are taxed or
capital stock. Merchants are taxed or
purchases Of merchandise.
The old law provided that mer.
chants must pay tan on what they
purchased The Virginia courts ruled
that this was interpreted to NEAR
what was purehs sed from other reo-
pis. and that therefore the product OF
n manufacture taken from the place
OF production and sold In retail or
other esta blishment owned by the came
interests was exempted
Lexfstatur~ Amends STATUTE.
Then along came the legislature am
amended the statute TO provide that q
retail Establishments purchases wer'
such goods or merchandise as Were
purchased for the account of that es-
.ablishment. regardless whether or mo-
the manufacturer did or did not owr
the retail establishment,
The Armour company claimed they
were manufacturers maintaining
plants In other states. Ohio and III,
nois, and merely sent their product u
the virginia distributing establish,
ments for sale. and that such products
rame within the provisions or the Law
relating TO interstate commerce. or
which Virginia could not levy tax.
Sustained hy Chf~f Ju~<sce white,
Mr.. Hank argued that the defenan n
company should be subject to the same
provisions Of the law as were othei
merchants. He argued that the ta
o. merchants was rrsdicEtsd on hi
purchases and included In those pur
chases we're goods even when sen
from the merchants own manufactur
Ing plant TO the alnce OF sale, in s.n
swer to the defendants claim Of dis
criminstion because they had no man
ufacturfna establishment IN Virginia
Mr. Hank argued that there was vas
difference, actual scr!rainstion and
fact of incidental disadvantage. Chic
Justice white sustained that position
IN handing down decision for tn
state.
The amount involved IN this particu
lar case was $4,000. Taxes to be lev
led throughout the state in accordarc,
TO this decision will in the aggreeat,
reach approximately half a million
asllArs annually.