We have a record of his opinion upon the particular question now under consideration in a copy of his brief or points in that case found in Hamilton's Works, vol p. 7, 332, in which he asserts that the only direct taxes are: "Capitation taxes, on land and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate; all else must, of necessity, be considered as indirect taxes." As to the suggestion that in the case stated, perhaps, the rule of apportionment would be the most proper, it is clear that if the tax might lawfully be levied upon the basis of apportionment it must be so levied. As before observed, Congress has no option, but must follow the prescribed measure, inasmuch as the two measures lead to widely different results to the individual taxpayer. Upon the question whether, upon the assumption that a tax upon the capital of bonds and other personal estate held for the purpose of income or ordinarily yielding income, would be a direct tax within the meaning of the Constitution, a tax imposed by general assessment upon the interest or other income of such bonds or other personal estate must likewise be regarded as such a direct tax, not much need be specifically said here; inasmuch as we conceive that nearly all the considerations which we have above urged, for showing that a tax upon the rent or income of real estate differs not in respect of directness or indirectness from a tax upon the real estate eo nomine, establish with like effect, and substantially upon like grounds and reason, the proposition, that a tax upon the interest or other income of such bonds or other personal estate differs not, in respect of directness or indirectness, from a tax upon such bonds or other personal estate eo nomine; except that we desire to say in addition, that, as we conceive, in respect of bonds of ordinary character, such as railroad bonds, State or municipal bonds, bonds and mortgages, United States bonds, such as the so-called currency sixes, and all other bonds of such general nature, it is even more certain and free from doubt (if that be possible) that a tax upon the interest is, for all purposes here involved, of like character and effect as a tax upon the principal would be, than it is that a tax upon the rent or income is of like character and effect as a tax upon the capital or corpus of the real estate from which it accrues; because the interest is as much and as clearly a part of the bond itself as is the principal. Upon reading one of such bonds, say an ordinary thousand dollar, thirty-year, six per cent. bond, we shall of course find that it is an obligation to pay the thousand dollars at the end of the thirty years, and in the meantime to pay thirty dollars on each of the specified semi annual interest days; and so in legal effect is it with ordinary bonds and mortgages made by individuals, during the time they have to run. There is a steady and increasing desire on the part of the legal profession and citizens liv ing abroad to have a codification of private international law, and on this subject the Law Times says: "A theory held by certain English writers of the Austinian school, and described by some continental writers as the Anglo-American theory, denies that private international law has any relation to the law of nations. The municipal laws of various States resemble each other in those chapters which deal with the interterritorial application of private law, and that is all. One obvious objection to this deduction from the Austinian theory of law and sovereignty has been pointed out by various continental writers. Is it not open to States to frame international treatises on the interterritorial application of foreign law to private persons? And, if those treaties are entered into, would they not constitute a part of the conventional law of nations? And cannot that be done by custom and implied assent which it is possible to do by treaty? Whatever answer might be given by the Austinian jurist to the last question, no negative reply can be given to the preceding. It is obviously within the power of States to frame treaties on private international law; and those treaties will undoubtedly form part of the law of nations. The matter no longer rests in the domain of possibilities; more than one international agreement on certain heads of private international law has been formulated; and once again facts, with their proverbial perverseness, have proved recalcitrant to theory. "In 1892 the Dutch government issued invitations to the powers of the civilized world, accompanied by an official statement of the views of the government on the necessity of the utility of the conference. The government also submitted a drafted programme of topics to be considered. In this programme (the work of M. Asser) those topics were selected for consideration on which opinion is most formed, and which consequently gave most promise of unanimous agreement. In the first place, general principles on the extraterritorial application of foreign law were indicated, on which the conference were invited to express an opinion. In the next place, it was submitted, rules should be adopted in the interterritorial recognition of family rights. Lastly, the government submitted the necessity of framing an international agreement on the extraterritorial recognition and enforcement of foreign judgments. In the result the delegates unanimously agreed to submit to their governments for adoption rules on several heads of private international law. Apart from the merits of the subject-matter of these recommendations, it is to be noted that it can no longer be said that private international law has no relation to the law of nations. Nearly all the great powers have by their accredited representatives formally expressed their adhesion to the contrary theory, and it can only be a question of time when the assent of the whole civilized world will be secured to this needed extension of the acknowledged rule of "The Conference of the Hague of Septem- The living fountain of the law of nations is to ber, 1893, united delegates of the governments be found in Europe, its historic place of origin. of Austria-Hungary, Belgium, Denmark, Hence the importance of the conferences of France, Germany, Holland, Italy, Luxemburg, the Hague of September, 1893, and of June and Portugal, Roumania, Russia and Switzerland. July, 1894. The conference assembled at the invitation of the Dutch government addressed to the various governments of European States, for the purpose of arriving at an international understanding on various points of private international law. Sweden and Norway, in addition to the powers enumerated above, accepted the invitation to the conference, but the British government refrained from sending a delegate, on the ground, it was stated, of the difference between the nature of English law, so largely customary, and the codified laws of the other States of Europe. This conference was the result of a long series of steps in the direction of creating an international agreement on private international law, commenced by the government of Holland as far back as 1874. The next power to make an effort in the same direction was Italy. In 1881, Mancini, the founder of the new Italian school of international law, was minister of justice in Italy. From 1881 to 1884 negotiations were carried on by the Italian government with a view to the adoption of a treaty on the whole subject of private international law, and not merely on one of its chapters. These negotiations were unsuccessful. Their having been undertaken, however, marked a distinct step in advance. The next step was taken on the other side of the Atlantic. In 1889, on the invitation of the Argentine Republic and of Uruguay, the Congress of Montevideo assembled. As the result of the labors of the congress a series of treaties was concluded, laying down uniform rules on the conflict of laws for all the principal South American States. Here, then, the rules of One of the provisions of the income tax, the private international law emerged beyond ques-operation of which will be watched with contion into the sphere of the conventional law of siderable interest by lawyers and laymen alike, nations. "But this international recognition of the rules of private international law only applied to a minor division of the States of the civilized world. The South American Republics are distinguished by the theoretical perfection of their codes, and by the theoretical supremacy of the rule of law; but they can only add a contributing voice in the concert of the civilized world. law." and which, so far as we know, has never been raised before, is, as to the power to collect an income tax from a foreigner. It must be remembered that the income tax acts during the war did not include foreigners, and the internal revenue officers held on several occasions that the act could not include them, because they were beyond the jurisdiction of the taxing power. There is undoubtedly a distinction be tween a tax levied in rem against property within our jurisdiction and on the total income or a foreigner derived from the property which he possesses in this country. It must be apparent that, as corporations are taxed directly on their net profits under the law, the income derived by foreigners from such property is decreased by the amount of such taxation. There seems to be no doubt but that the United States or any State can impose such a tax, which, though in reality it is paid by the foreigner, yet, so far as actual payment is concerned, such payment is made by the corporation in which he is interested. The imposition of taxes on corporations within the State of New York compels those who are not residents of this country to pay some part toward the support of the government. In the case of real property it is undoubtedly subject to the burden of taxation, otherwise it would be taken by the State for non-payment of the same. In the income tax, however, the foreigner, as the law contemplates, must make a return to the collector of the district in which it is presumed he resides, or in which it is presumed his property is situated. Should he fail to do so, or should he make a false return, he is subject to the same penalties that the American citizen must submit to. This is only another example of the lack of common sense in the framing of this much-talked-of law, and reveals most clearly that its advocates, as The Dodge bill exempted estates of $20,000 from the operation of the tax and thus made a distinction which was clearly unconstitutional. Any person succeeding to an estate of $20,000 could reduce it to possession without the payment of a single penny for taxation, but one inheriting an estate in excess of the amount would have to pay the tax, similar in many respects to the collateral inheritance tax of the State of New York. This process of taxation, the court held, was contrary to the constitutional requirement of uniformity, and hence it very properly decided that the law was invalid, as it violated this requirement. It is most pleasing to notice that if the Supreme Court of Ohio were determining the constitutionality of the Income Tax Act of 1894, that their decision would be entirely and overwhelmingly against the legality of the law, for which they have no place on the statute books of their State. THE INCOME TAX - THE OPINION OF JUSTICE FIELD. UNITED STATES SUPREME COURT, APRIL 8, 1895. CHARLES POLLOCK, Appellant, v. THE FARMERS' LOAN AND TRUST COMPANY AND OTHERS, Appellees. LEWIS H. HYDE, Appellant, v. THE CONTINENTAL TRUST COMPANY OF THE CITY OF NEW YORK, Appellees. PPEALS from the Circuit Court of the United well as those persons directly interested in pre-A States for the Southern District of New York. paring it, had but little knowledge of the subject of taxation, and possessed much less real affection for the ultimate welfare of American institutions. The Dodge inheritance-tax law of Ohio was recently decided to be unconstitutional by the Circuit Court. The contention on the part of the opponents of the measure, and on which the decision was based was that the provision of the Constitution requires taxation should be uniform. There could be no question here of State uniformity as in the case of the Federal Constitution, which has practically the same provision. The court held in substance that the provision of the Constitution must mean that there should be no discrimination between various owners of property, that one rate and method of taxation should be applied to all. FIELD, J. I also desire to place my opinion on record upon some of the important questions discussed in relation to the direct and indirect taxes proposed by the income tax law of 1894. Several suits have been instituted in State and Federal courts, both at law and in equity, to test the validity of the provisions of the law, the determination of which will necessitate careful and extended consideration. The subject of taxation in the new government which was to be established created great interest in the convention which framed the Constitution, and was the cause of much difference of opinion among its members and earnest contention between the States. The great source of weakness of the confederation was its inability to levy taxes of any kind for the support of its government. To raise revenue it was obliged to make requisitions upon the States, which were respected or disregarded at their pleasure. Great embarrassments followed the consequent inability to obtain the necessary funds to carry on the government. One of the principal objects of the proposed new government was to obviate this defect of the confederacy by conferring authority upon the new government by which taxes could be directly laid whenever desired. Great difficulty in accomplishing this object was found to exist. The States bordering on the ocean were unwilling to give up their right to lay duties upon imports which were their chief source of revenue. The other States, on the other hand, were unwilling to make any agreement for the levying of taxes directly upon real and personal property, the smaller States fearing that they would be overborne by unequal burdens forced upon them by the action of the larger States. In this condition of things great embarrassment was felt by the members of the convention. It was feared at times that the effort to form a new government would fail. But, happily, a compromise was effected by an agreement that direct taxes should be laid by Congress by apportioning them among the States according to their representation. In return for this concession by some of the States, the other States bordering on navigable waters consented to relinquish to the new government the control of duties, imposts and excises and the regulation of commerce, with the condition that the duties, imposts and excises should be uniform throughout the United States. So that, on the one hand, anything like oppression or undue advantage of any one State over the others would be prevented by the apportionment of the direct taxes among the States according to their representation, and, on the other hand, anything like oppression or hardship in the levying of duties, imposts and excises would be avoided by the provision that they should be uniform throughout the United States. The Constitution, accordingly, when completed, divided the taxes which might be levied under the authority of Congress into those which were direct and those which were indirect. Direct taxes, in a general and large sense, may be described as taxes derived immediately from the person, or from real or personal property, without any recourse therefrom to other sources for reimbursement. In a more restricted sense, they have sometimes been confined to taxes on real property, including the rents and income derived therefrom. Such taxes are conceded to be direct taxes, however taxes on other property are designated, and they are to be apportioned among the States of the Union according to their respective numbers. The second section of article I of the Constitution declares that representatives and direct taxes shall be thus apportioned. It had been a favorite doctrine in England and in the colonies, before the adoption of the Constitution, that taxation and representation should go together. The Constitution prescribes such apportionment among the several States according to their respective numbers, to be determined by adding to the whole number of free persons, including those bound to service for a term of years, and excluding Indians not taxed, three-fifths of all other persons. Some decisions of this court have qualified or thrown doubts upon the exact meaning of the words "direct taxes." Thus in Springer v. United States (102 U. S. 586), it was held that a tax upon gains, profits and income was an excise or duty, and not a direct tax withing the meaning of the Constitution, and that its imposition was not, therefore unconstitutional. And in Pacific Ins. Co. v. Soule (7 Wall. 433) it was held that an income tax or duty upon the amounts insured, renewed or continued by insurance companies upon the gross amounts of premiums received by them and upon assessments made by them, and upon dividends and undistributed sums, was not a direct tax, but a duty or excise. In the discussions on the subject of direct taxes in the British Parliament an income tax has been generally designated as a direct tax, differing in that respect from the decision of this court in Springer v. United States. But whether the latter can be accepted as correct or otherwise, it does not affect the tax upon real property and its rents and income as a direct tax. Such a tax is by universal consent recognized to be a direct tax. As stated, the rents and income of real property are included in the designation of direct taxes as part of the real property. Such has been the law in England for centuries, and in this country from the early settlement of the colonies; and it is strange that any member of the legal profession should at this day question a doctrine which has always been thus accepted by common-law lawyers. It is so declared in approved treatises on real property and in accepted authorities on particular branches of real estate law, and has been so announced in decisions in the English courts and in our own courts without number. Thus, in Washburn on Real Property it is said that "a devise of the rents and profits of land, or the income of land, is equivalent to a devise of the land itself, and will be for life or in fee, according to the limitation expressed in the devise." (Vol. 2, p. 695, § 30.) In Jarman on Wills it is laid down that "a devise of the rents and profits, or of the income of land, passes the land itself both of law and in equity; a rule, it is said, founded on the feudal law, according to which the whole beneficial interest in the land consisted in the right to take the rents and profits. And since the act of 1 Vict., ch. 26, such a devise carries the fee simple; but before that act it carried no more than an estate for life, unless some of the judges are now of a different opinion from those who, a century ago, followed it in fram words of inheritance were added." Mr. Jarman Coke upon Littleton says: "If a man seized of lands in fee by his deed granteth to another the profit of those lands, to have and to hold to him and his heires, and maketh livery secundum formam charta, the whole land itselfe, doth passe; for what is the land but the profits thereof?" (Lib. 1, cap. 1, § 1, p. 46.) Hamilton, speaking on the subject, asks: "What is property but a fiction without the beneficial use of it?" And adds: "In many cases the income or annuity is the property itself." It must be conceded that whatever affects any element that gives an article its value, in the eye of the law affects the article itself. doing the forbidden thing. All must perceive that a tax on the sale of an article imported only for sale is a tax on the article itself." In Brown v. Maryland (12 Wheat. 419) it was held that a tax on the occupation of an importer is the same as a tax on imports, and as such was invalid. It was contended that the State might tax In Doe d. Goldin v. Lakeman, Lord Tenterden, occupations, and that this was nothing more, but the court said, by Chief Justice Marshall (p. 444): chief justice of the Court of King's Bench, to the same "It is impossible to conceal from ourselves that effect said: "It is an established rule that a devise this is varying the form without varying the subof the rents and profits is a devise of the land." stance. It is treating a prohibition which is genAnd in Johnson v. Arnold, Lord Chancellor Hard-eral as if it were confined to a particular mode of wicke reiterated the doctrine "that a devise of the profits of lands is a devise of the lands themselves." The same rule is announced in this country, the Court of Errors of New York, in Patterson v. Ellis (11 Wend. 259, 278), holding that the "devise of the interest or of the rents and profits is a devise of the thing itself, out of which that interest or those rents and profits may issue;" and the Supreme Court of Massachusetts, in Reed v. Reed (9 Mass. 372, 373) that "a devise of the income of lands is the same in its effect as a devise of the lands." The same view of the law was expressed in Anderson v. Greble (1 Ashmead's Rep. 136, 138), King, the president of the court, stating: "I take it to be a well settled rule of law that by a devise of the rent, profits and income of land, the land itself passes." Similar adjudications might be repeated almost indefinitely. One may have the reports of the English courts examined for several centuries without finding a single decision, or even a dictum of their judges, in conflict with them. And what answer do we receive to these adjudications? Those rejecting them furnish no proof that the framers of the Constitution did not follow them, as the great body of the people of the country then did. An incident which occurred in this court and room twenty years ago may have been a precedent. To a powerful argument then being made by a distintinguished counsel on a public question, one of the judges exclaimed that there was a conclusive answer to his position, and that was that the court was of a different opinion. Those who decline to recognize the adjudications cited may likewise consider that they have a conclusive answer to them in the fact that they also are of a different opinion. I do not think so. The law, as expounded for centuries, cannot be set aside or disregarded because In Weston v. Charleston (2 Pet. 449) it was held that a tax upon stock issued for loans to the United States, was a tax upon the loans themselves, and equally invalid. In Dobbins v. Commissioners (16 Pet. 435) it was held that the salary of an officer of the United States could not be taxed if the office was itself exempt. In Almy v. California (24 How. 169) it was held that a duty on a bill of lading was the same thing as a duty on the article transported. In Cook v. Pennsylvania (97 U. S. 566) it was held that a tax upon the amount of sales of goods made by an auctioneer was a tax on the goods sold. In Philadelphia Steamship Co. v. Pennsylvania (122 U. S. 326) and Leloup v. Mobile (127 id. 640, 648), it was held that a tax upon the income received from interstate commerce was a tax upon the commerce itself, and equally unauthorized. The same doctrine was held in People v. Commissioners (90 N. Y. 63), State Freight Tax (15 Wall. 232, 274), Welton v. Missouri (91 U. S. 275, 278), and in Fargo v. Michigan (121 id. 230). The law, so far as it imposes a tax upon land by taxation of the rents and income thereof, must, therefore, fail, as it does not follow the rule of apportionment. The Constitution is imperative in its directions on this subject, and admits of no departure from them. But the law is not invalid merely in its disregard of the rule of apportionment of the direct tax levied. There is another and an equally cogent objection to it. In taxing incomes other than rents and profits of real estate it disregards the rule of uniformity which is prescribed in such cases by the Constitution. The eighth section of the first arti |