Year: 1866

Opinion Of nm O1ncer Of the Geyernment.


TO THE EDITOR OF THE HERALD.
The course Of Judge Nelson N the controversy b.
tween the bankers and brokers' the hand and the
taxpayng public generally the other as represented
by the ofacen Of internal revenue, will be found In
many respects worthy Of attention.


The magnitude OF the interests involved apd the for
mdable combination Of classes opposed TO taxation made


especially important that the matersin dispute should
be considered with the utmost and research, and
adiudged without favor or prejudice.


The controversy originated In an attempt on tne par,
Of the bankers and brokers 10 resist the effect OF an
amendment made by Congress- in 1885 to the ninth sub.
division, section, Of the Internal
act for the purpose OF checking the notorious frauds OF
those classes in making their Of sales as for per-
sonal account TO evade taxation.


To the astonishment Of all conversant with the facts
the Judge when the question up before him, de-
cided the case against the government In respect 70
the effect of the amendment by Congress- which was the
rst of the whole case declared written opinion
sThs enarges the definition OF broker and makes the
term embrace person or hrm negotiating parcnases 2.
and ssthe object Of the change Of meaning In the
ninth subdivision of section 70 by the amendment not


The government properly ignored such decision, and
directed the officers to proceed as before Ger
brokers then applied to the same Judge for an in
on this application turned solely upon our opinion as
to their liability to this tax we should iesi
bound to grant 1t at once,n yet declined TO
grant the writ for reasons which will be
hereafter mentioned The cases were promptly carried



ISSUE the effect of the amendment of 1865 the decision
OF this judge unanimously reversed. The opnion
OF the Supreme Court by Justice Ter fatty contradcs


the statements of the Circuit Judge declaring that the
amendment did not enlarge the definition OF broker
and that the object Of the amendment was transparent
As there record of dissent by the Circuit Judge


s to be presumed that he had found out the error OF MS
ways. II may well be subject of speculation however,
to the common mind how that which was SO clear
the full bench OF the Supreme Court December
dark to the Judge at Circuit in August The re.
suit at all events It would seem should inculcated
andm m
The public justly gratied with the result and
the matter was supposed to be settled The brokers
had In fact received their qiietus but the bankers


imagined they had still loophoe Of escape, and the ap-
pearance Of the Judge in town was the signal for


ton against the officers Of Tho merits Of the
were assumed by the Circuit Judge to depend on
what decided in the Of Fisk Hatch In the
Supreme Court which he states follows United
States Fisk ct al, decided at the last term, carried


for II there held that he could purchase and sell
stocks bonds, &c for himself and on his own account
under his license business not specified n the deni.
business which banker could carry such did not
fall within the ninety ninth section of the act"
How utterly absurd this is may be judged from the
fact that the right Of banker Of any to pur
chase sell stocks bonds &C., for himself aud his
own account in question II in sense
"priviegen - accrung to the banker by virtue of his
license hut right which he entitled to exercise in
common with every other member OF the community,
the folly of holding that it was business which banker
privileged by his license to carry on as SUCH The
"
cison is that the bankers sufficiently taxed under the
10th section and that according to the government
construction the license or privilege OF the banker
would be of little value"


Congress have taken different view on this
point has just passed amendment to the Reve-
nue. act entire accordance with the views of tho in
lerna revenue officers and the opinion of the Attorney
Generals oice given at their request, which Is now
law, and which will compel these bankers to pay tho
identical taxes which this judge has undertaken TO re-
leve them from 1t appears, therefore, that that con-
sruction which the judge In contempt OF all these au
thorities stigmazes "extraordnary proposition,


is to other minds but simple justice, and must hence
forth be obsyed by him,


But there is another aspect Of the case in which tho
Judges consistency is conspicuous The application for
injunction In the OF seymour w. Shook OF al was
denied tho following ground, expressed IN the
judges opinion =" We have said that in ordinary
cases this Of Injunction will be granted to prevent
multiplicity of suits nc law The embarrassment In tho
s from the great number OF persons Affected
cation almost If not quite onerous and vexatous as
suits at law. Each taxpayer would be Obliged 10 ME
bill n in order to obtain relief As TO the litigation and
multiplicity OF SUITS therefore, the difference in the pro-
ceedings the tribunal the other will scarcely
justify the nterposion OF court OF equity in favor OF
the party complaining, especially where the inconven-
ience to the government In the collecting or its public
revenue is much more serious in the latter tribunal"


II this good law In 1865 II Is hard to see why 1t
should not be applied by the same judge in precisely
similar in 1868.


have thus presented few Of the many peculiar fea-
tures Of this controversy II proper that public atten-
ton should bo directed to the conduct OF those under
whose control such important interests arc subjected
and that negligence ncompeency should be called 70
account before the bar at least Of public opinion.


AN OFFILER OF THE GOVERNMENT


NEW York, July 20, 1885,