Source: https://supreme.justia.com/cases/federal/us/192/418/
Timestamp: 2019-04-22 04:07:32+00:00

Document:
The prohibition in the Constitution against taxes or duties on exports attaches to exports as such, and does not relieve articles manufactured for export from the prior ordinary burdens of taxation which rest upon all property similarly situated.
In construing a statute, the title is referred to only in cases of doubt and ambiguity, and where doubt exists as to the meaning of a statute in regard to a privilege claimed from the government thereunder, it should be resolved in favor of the government.
The fact that a quantity of "filled cheese" was manufactured expressly for export does not exempt it from the tax imposed by the Act of June 6, 1896, 29 Stat. 253, and the reference in that act to the provisions of existing laws governing the engraving, issue, etc., of stamps relating to tobacco and snuff, and making them applicable to stamps used for taxes on filled cheese as far as possible, does not relate to stamps issued without cost for tobacco and snuff manufactured for export.
or to exporters of filled cheese shall be in original stamped packages."
"SEC. 9. That, upon all filled cheese which shall be manufactured, there shall be assessed and collected a tax of one cent per pound, to be paid by the manufacturer thereof, and any fractional part of a pound in a package shall be taxed as a pound. The tax levied by this section shall be represented by coupon stamps, and the provisions of existing laws governing the engraving, issue, sale, accountability, effacement, and destruction of stamps relating to tobacco and snuff, as far as applicable, are hereby made to apply to stamps provided for by this section."
"SEC. 11. That all filled cheese as herein defined imported from foreign countries shall, in addition to any import duty imposed on the same, pay an internal revenue tax of eight cents per pound, such tax to be represented by coupon stamps, and such imported filled cheese and the packages containing the same shall be stamped, marked, and branded, as in the case of filled cheese manufactured in the United States."
manufactured for export trade and exported and sold in foreign markets wholly without the United States might be exported and sold free from the levy of any duty or tax thereon; or provision whereby the same might be freed from the force and effect of said act, are repugnant to said Section 9, Article I, of the Constitution of the United States, and that this suit therefore involves the construction or application of the Constitution of the United States."
A demurrer to the declaration was sustained. They elected to stand by the declaration. Judgment was entered in favor of the defendant, and thereupon this writ of error was sued out.
The contention is that, inasmuch as this filled cheese was manufactured under contract for export, and was in fact exported, the tax of one cent per pound prescribed by section 9 was prohibited by the fifth paragraph of Section 9, Article I, of the Constitution, which reads: "No tax or duty shall be laid on any articles exported from any state."
in both cases has reference to the imposition of duties on goods by reason or because of their exportation or intended exportation, or whilst they are being exported. That would be laying a tax or duty on exports, or on articles exported, within the meaning of the Constitution. But a general tax, laid on all property alike, and not levied on goods in course of exportation, nor because of their intended exportation, is not within the constitutional prohibition."
See also Brown v. Houston, 114 U. S. 622; Coe v. Errol, 116 U. S. 517.
"The Congress of the United States, during the late Civil war, imposed a tax upon cotton and tobacco, which tax was not limited to those products when in the process of transportation, but was assessed on all the cotton and tobacco in the country. It was argued that, because the larger part of these products was exported out of the country and sold to foreign nations, and because their production was limited to a particular part of the country, the tax was forbidden by the corresponding clause of the Constitution prohibiting Congress from levying a tax on exports. Although the question came at that time to the Supreme Court of the United States, it was not then decided, because of a division of opinion in that Court. The recent cases, however, of Coe v. Errol, 116 U. S. 517, and Turpin v. Burgess, 117 U. S. 504, seem to decide that the objection was not valid, and hold that only such property as is in the actual process of exportation, and which has begun its voyage or its preparation for the voyage, can be said to be an export."
"Commerce succeeds to manufacture, and is not a part of it. . . . The fact that an article is manufactured for export to another state does not of itself make it an article of interstate commerce, and the intent of the manufacturer does not determine the time when the article or product passes from the control of the state and belongs to commerce."
There is nothing in the case of Fairbank v. United States, 181 U. S. 283, inconsistent with these views. There, the question was as to the validity of a stamp tax on a foreign bill of lading, and it was held that it was a tax directly on the exportation. As said in the opinion with reference to the constitutional provision (p. 181 U. S. 292): "The purpose of the restriction is that exportation, all exportation, shall be free from national burden." It is unnecessary to refer to the earlier legislation of Congress, which, as shown by counsel for the government in his brief, has been in harmony with this construction. From what we have said, it is clear that there is no constitutional objection to the imposition of the same manufacturing tax on filled cheese manufactured for export and, in fact exported, as upon other filled cheese.
"the provisions of existing laws governing the engraving, issue, sale, accountability, effacement, and destruction of stamps relating to tobacco and snuff, as far as applicable, are hereby made to apply to stamps provided for by this section,"
is to be construed as incorporating all provisions respecting stamps "relating to tobacco and snuff," including those for stamps on exports, which are issued free of charge.
Assuming, without deciding, that we may rightfully reverse the judgment of the circuit court for a failure to consider a question which was not presented, and that we may treat the declaration as amended so as to present this question, we are of opinion that the contention as to the construction of the act cannot be sustained. The title of an act is referred to only in cases of doubt or ambiguity.
"The title is no part of an act, and cannot enlarge or confer powers, or control the words of the act unless they are doubtful or ambiguous. United States v. Fisher, 2 Cranch 358, 6 U. S. 386; Yazoo & Mississippi v. Thomas, 132 U. S. 174, 132 U. S. 188. The ambiguity must be in the context, and not in the title, to render the latter of any avail."
United States v. Oregon &c. Railroad, 164 U. S. 526, 164 U. S. 541. See also Price v. Forrest, 173 U. S. 410, 173 U. S. 427, and cases cited.
"that upon all filled cheese which shall be manufactured there shall be assessed and collected a tax of one cent per pound, to be paid by the manufacturer thereof."
governing the engraving, issue, etc., of stamps relating to tobacco and snuff, that clause is a part of the sentence which provides that the tax levied by this section shall be represented by coupon stamps, and the existing laws governing the engraving, issue, etc., of stamps are in terms "hereby made to apply to stamps provided for by this section" as far as applicable. In other words, the provisions of existing laws concerning the engraving, issue, etc., of stamps are made applicable only to stamps representing taxes. There is neither directly nor indirectly any reference to stamps issued without cost to cover an exportation free from tax or duty. While in section 3 there is special reference by number to various sections of the Revised Statutes concerning special taxes, and they are made to extend so far as applicable to the taxes authorized by this act, there is nowhere any mention of section 3385, Rev.Stat., which provides for relieving exported manufactured tobacco and snuff from the manufacturing tax. Further, in section 6 it is directed that all sales to exporters of filled cheese shall be in original stamped packages, and this direction is in the same sentence with that providing for sales to wholesale dealers. Clearly there is nothing in the body of the act exempting exported filled cheese from the ordinary manufacturing tax on other filled cheese. But if there were a doubt as to the meaning of the statute, that doubt should be resolved in favor of the government. Whoever claims a privilege from the government should point to a statute which clearly indicates the purpose to grant the privilege.
Lawrence & Galveston Railroad v. United States, 92 U. S. 733; Fertilizing Co. v. Hyde Park, 97 U. S. 659."
Hannibal &c. Railroad Co. v. Packet Co., 125 U. S. 260, 125 U. S. 271.
Why Congress should grant an exemption from manufacturing tax in the case of exported tobacco and not in the case of exported filled cheese is not for us to determine. Doubtless the reasons which prompted such difference were satisfactory. It is enough that no exemption has been made in favor of the latter.
MR. JUSTICE BROWN did not hear the argument, and took no part in the decision of this case.
As this case went off upon demurrer by the government to the declaration, its material allegations must be taken as true. The case cannot properly be dealt with upon any other basis.
act of Congress, approved June 6, A.D. 1896, with reference to internal revenues; but notwithstanding the fact that such filled cheese was manufactured for export, and was about to be delivered by the plaintiffs for export and shipment to a foreign market, . . . the defendant did at various times during said period, and on the dates of shipment of said filled cheese, by force, duress, exact,"
Upon the occasion of each of the shipments, the internal revenue collector exacted and collected (against the protest of the plaintiffs) a tax upon the cheese of one cent per pound, the collector insisting that such a tax was imposed by the act of Congress of June 6, 1896, entitled "An Act Defining Cheese, and Also Imposing a Tax Upon and Regulating the Manufacture, Sale, Importation and Exportation of Filled Cheese." 29 Stat. 253, c. 337.
The first question to be considered is whether Congress intended by that act to impose a tax of one cent per pound upon filled cheese manufactured for exportation, and which, it is admitted, was in fact exported immediately after being so manufactured. Such is the case before the Court for consideration.
"upon all filled cheese which shall be manufactured there shall be assessed and collected a tax of one cent per pound, to be paid by the manufacturer thereof, and any fractional part of a pound in a package shall be taxed as a pound. The tax levied by this section shall be represented by coupon stamps, and the provisions of existing laws governing the engraving, issue, sale, accountability, effacement, and destruction of stamps relating to tobacco and snuff, as far as applicable, are hereby made to apply to stamps provided for by this section."
the jurisdiction of the United States, or upon satisfactory proof that, after shipment the same were lost at sea."
It requires no argument to prove that, under that section, manufactured tobacco and snuff "intended for immediate exportation" could be exported without payment of any tax and without having affixed thereto any stamp other than "an engraved stamp indicative of such intention." The effect of the reference in the last clause of the ninth section of the act of 1896, to "existing laws governing the engraving, issue, sale, accountability, effacement, and destruction of stamps relating to tobacco and snuff" was, I think, to incorporate into that act section 3385 of the Revised Statutes, so far as it could be made applicable to filled cheese, and to allow filled cheese intended for immediate exportation to be removed from the manufactory without payment of any tax, having affixed to it no other stamp than one engraved and indicating the intention to export. In that view, which seems to me incontestable, the purpose of Congress was to put manufactured filled cheese intended for immediate exportation upon the same footing as manufactured tobacco and snuff intended for immediate exportation, and to permit its exportation without payment of any tax. Certainly section 3385 was one of the existing laws at the date of the passage of the act of 1896, and if applied to that act the result, I submit, must be as just stated. This question is within such narrow compass that it cannot be elucidated by extended discussion, and if the bare reading of the above statutes, all together, does not bring the mind to the conclusion indicated by me, argument to that end would be unavailing.
So I leave that question and come to the proposition that, if the act of 1896 is to be construed as imposing a tax upon the plaintiff's cheese when about to be exported, then it is in conflict with the Constitution.
do. The express words of that instrument are that "no tax or duty shall be laid on articles exported from any state." Manifestly, so far as any prohibitory action by Congress is concerned, the object of that provision was to open the markets of the world to the products and manufactures of the several states, freed from any tax or burden whatever imposed by the United States. This Court said in Fairbank v. United States, 181 U. S. 283, 181 U. S. 292, that the "purpose of the restriction [on the power of Congress] is that exportation, all exportation, shall be free from national burden."
the commencement of manufacture and the preparation for exportation, when it could be reasonably said that the cheese had become a part of the general mass of property in the locality of its manufacture for purposes of sale, delivery, or consumption in this country. So that the question arises whether it is consistent with the constitutional injunction "no tax or duty shall be laid on articles exported from any state" that, at the instant when an article admittedly manufactured for exportation is being prepared in good faith for exportation, not for sale or consumption here, a national tax be laid on such article as property. If that question be answered in the affirmative, then the purpose of the constitutional restriction that "all exportation shall be free from national burden" may be defeated, for if, in such circumstances as are disclosed in this case, Congress can impose a tax of one cent per pound on filled cheese, manufactured and intended for immediate exportation, and about to be exported, it can impose such taxes on articles manufactured in this country and intended for immediate exportation as will make it impossible for manufacturers to secure, or will deter them from attempting to secure, contracts with foreign consumers or buyers. The result would be that Congress, in time of peace and by means of taxation, could bring about a condition of utter occlusion between the manufacturers of this country and the markets of other countries. Indeed, the several states could bring about that result by taxation, for if an article manufactured for exportation and which was prepared for exportation as soon as manufacture was completed is not an export from the moment such preparation was begun, then a state may impose a tax upon it as property and compel the payment thereof before the article is removed from its limits for exportation. I do not think that the framers of the Constitution contemplated such a condition as possible.
of the United States, during the late Civil War, imposed a tax upon cotton and tobacco, which tax was not limited to those products when in the process of transportation, but was assessed on all the cotton and tobacco in the country. It was urged that, because the larger part of these products was exported out of the country and sold to foreign nations, and because their production was limited to a particular part of the country, the tax was forbidden by the corresponding clause of the Constitution prohibiting Congress from levying a tax on exports. Although the question came at that time to the Supreme Court of the United States, it was not then decided, because of a division of opinion in that Court. The recent cases, however, of Coe v. Errol, 116 U. S. 517, and Turpin v. Burgess, 117 U. S. 504, seem to decide that the objection was not valid, and hold that only such property as is in the actual process of exportation, and which has begun its voyage or its preparation for the voyage, can be said to be an export."
a mere stamp tax on a bill of lading taken at the time articles were shipped from a state to a foreign country was a tax on the articles themselves as exports, and was forbidden by the constitutional provision that no tax or duty shall be laid on articles exported from any state. It is now held that a tax on articles admittedly manufactured only for exportation, and not for sale or consumption in this country, and which are exported as soon as they can be made ready for shipment, after the completion of manufacture, in execution of contracts entered into prior to the commencement of manufacture, is a tax on the articles themselves as property, and not on them as exports. In short, the effect of the present decision is to say that if Congress so wills, articles manufactured in this country, although manufactured only for exportation, and not for sale or consumption here, cannot be exported to other countries except subject to such tax as Congress may choose to impose on the manufactured articles as property. Thus, despite the express prohibition of all taxes or duties upon articles exported from the states, Congress is recognized as having the same power over exports from the several states as it has exercised over imports from foreign countries. I do not think it has such power.
preparation could begin after manufacture. In the present case, as we have seen, it is admitted that the filled cheese was manufactured for exportation and was being prepared, immediately after manufacture, for exportation. The tax here was, in effect, collected while the cheese was being made ready for exportation, and therefore, to use the words of Turpin v. Burgess, whilst it "was being exported."
For the reasons stated, I am constrained to dissent from the opinion and judgment of the Court.
I am authorized to say that THE CHIEF JUSTICE concurs in this opinion.

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