Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-10-19
TAX
ISSUE IS ARGUED
! IN HIGHEST COURT
Question Of D. c. Non Repre-
sentation in Congress Ruled
Out Of Discussion.

Argument IN the SO-C2lle0 DlStf1Ct IN
tangible tax case was heard in the Su-
preme Court Of the United States yes
t0day afternoon. Under tho ruling Of
the court, however, the argument was
made only on tho questions certified to
the Supreme Court by the District Court
! OF Appeals, and the question as to the
power Of Congress to levy taxes upon
the inhabitants of the District without
| their being represented In the taxing
body was not ineluded.
1t may be. however, that tho Supreme
Court wfll order the casa sent back to
| the lower court. with instruottons to
submit the entire matter involved. and
that then the question relating to the
right Of the people to representation in
the taxing bedy win Be taken UP.
Col. A s. Werthinstoa. eae Of the
position taken by the government on
the intangible tax law, predicted that
sooner or later this question would come
to the highest court for adjudication
He outlined briefly what the questions
! were which he believed should be deter
, mined by the Supreme Court
Peters Estate Versus District.
The case argued before the Supreme
Court yesterday was that Of John c.
Head. George E. Hamilton and Wilton
]. Lambert, a committee representing
the estate Of Eugene Peters, against
the District Of Columbia. The commit
tee attacks the constitutionality of
tia intangible tax law for the District.
Vernon =. West and Col. Worthington
appeared for the committee, and F. H.
Stevens, corporation counsel, for the
District Of Columbia. Mr.. West opened
the argument. He was followed by
Mr.. Stephens. and Col. Worthington
Questions Certified to Court.
preme Court from the Court Of APP
peals were:
1. Does section > Of an act of Con-
gress approved March 3, 1917, under
which the assessment was made, re-
qnise that moneys and credits. in
and bonds and shares Of stock-of any
person, firm, association or corpora
ton engaged In business within the
District. but residing outside of the
District-shan be Aase6Sed by the Dis
trict Of Columbia for the purpose of
2. II it does. is it valid? And If in
valid does that render void the entire
aection?
;. Does the section require the Dis
and other securities of the states and
their municipal corporations held by
residents Of the District of Columbia,
and II 1t does. does its validity on that
account render the entire section
void?
Authsrteses CITED.
Taking up the first question. coun-
sci for the petitioner cited authorities
in the Supreme Court Of the United
authority to tax the intangible prop
erty OF non-Pesidents Of the District
except in 50 far as the Same may be
used In business transacted here. To
bring the act within the power of
Congress It would be necessary. it
was held. to limit it to money and
credits forming part Of the capital Of
business done in the District. and this
limitation would apply to residents
and non-restdents alike. This would
Congress had the power, and clearly
intended. to tax the intangible prop
eKty Of residents. no matter how used
and NO natter where situated. It was
contehded that. since 1t, is Impossible
to thus h,nit the operation Of the law.
It was contended, too, that the law
Is void because the clause exempting
the shares Of stock of business COM
panies which by reason Of or in addi-
ton 70 incorporation receive no spe-
etal franchise or privilege" Is 50
vague and indefinite as not to be sus-
ceptible OF reasonable construction.
There is no rule. 1t is asserted, by
which tho taxpayer can ascertain Just
what Is q special franchise or pffvi-
lege."
Dtseuas ExemD<ian Clause.
It was pointed out that residents Of
this District and non-residents en-
gagged in business hero hold shares Of
stock in thousanda Of business corpo-
rations holding cAArters-gPantad
either by special act or by general in
corporation laws-from every state in
this Union. and doubtless from every
civilized country in the worid. This
law. imposes upon the taxpayer the
duty Of sending for tho charters and
general Incorporation laws involved
In his case, and Of then trying to de-
termine which Of them has received
q special franchise or privilege.
And it was further contended that
the e1emptinE clause cannot be held
void. and the rest Of the law enforced,
since to do 20 would impose a tax
upon something Congress evidently
inteaded to exempt.
ClassiAeA ~ Most Quesf1Dns.
The corporation counsel. in his ar
gument, which was brief, commended
that the questions raised by the petit
tto0ers wore moot questions. since
There was NO question as to the fact
that intangible property upon which
the tax had been levied was that of
. resident Of the District in the hands
OF committee. and NOT exemDt under