Mr 39^51 BOUGHT WITH THE INCOME FROM THE SAGE ENDOWMENT FUND THE GIFT OF 1S91 AMIIL X$].llpl^J... Cornell University Library HJ 3251.A7G69 The war revenue law of 1898 explained 3 1924 021 162 510 The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924021162510 THE WAR REVENUE LAW OF 1898 EXPLAINED. THE WAR REVENUE LAW OF 1898 EXPLAINED. BY JOHN M. GOULD, JOINT AUTHOK OF GOULD AND TL"CKEk'S " NOTES ON THE REVISED STATITES OF THE UNITED STATES AND THE SUBSEQUENT LEGISLATION OF CONGRESS," ETC. AND EDWARD H. SAVARY, AUTHOR OF "builders' HANDBOOK," ETC. BOSTON: LITTLE, BROWN, AND COMPANY. 1898. f Copijright, 1898, By John M. Gould and Edward H. Savart. All fights reserved. janibcrsitg ^rcss: John Wilson and Sox, Cambridge, U.S.A. PREFACE. The War Revenue Law of 1898 touches the business world at every point, and a thorough collec- tion of all authorities interpreting its provisions must, therefore, be of value to all whose interests are within their scope. The present work contains the text of the law ; indicates the sources of the different sections; and, in connection with each section, presents such rules of interpretation as the government authorities and the decisions of the courts upon previous laws, from which the present Act is in great part derived, now make applicable ; also the decisions of the English courts upon similar provisions of British Stfimp Acts. In the Appendix, together with certain regulations of the Bureau of Internal Revenue, will be found a valua- ble paper prepared by the Abstract Club of Boston, upon the practical workings of the law in relation to real estate transactions, and here included by their permission. In this matter we have especially to thank Charles S. Rackemann, Esq., of the Boston Bar, a member of that club, for his kind offices. The authors are also indebted to George P. Beckford, Esq., and George E. Fox, Esq., both of the Boston Bar, for their aid in the preparation of the book and the verification of authorities. Boston, Sept. 10, 1898. TABLE OF CASES CITED. Allen 17. Morrison 79 Alter V. McDougal 81 Alvany v. Powell 110, 111 American Net & Twine Co. I'. Worthington 1 Ames V. Hill 76 Angler v. Smalley 80 Annandale v. Pattison 79 Atkins i;. Plympton 44,80 Australia Smelting. Co. v. Inland Rev. Com'rs 75 Baker v. Baker 43, 45, 81 Baldwin v. Alsager 76 Baring v. Inland Rev. Com •rs 74, 76 Barringer v. Cowan 111 Bartrum v. Caddy 76 Bathe v. Taylor 78 Beclitel 1). United States 8 Beecliing c. Westbrook 74 Bernard's Succession 31,81 Berry r. Boyd 80 Betliell V. Blencome 74 Bibb V. Bonds 81 Black V. Nettles 80 V. Woodrow 32,81 Blake v. McCartney HI Boston V. Nichols 80 Bowen v. Ashley 79 V. Byrne 31, 32 V. Fox 74 Bowker y. Goodwin 80 Bowman v. Nichol 77 Brooke v. Inland Rev. Com'rs 74 Brown v. Thompson 31,81 V. Tonkin 79 Browne v. Bennett 81 Brune v. Smith 111 Bumpass v. Taggart 31,81 Bunker v. Green 31 Burgess v. Salmon 126 Burson v. Huntington 31 Butler's Appeal 10 Butts V. Swan 39 Byram v. Thompson 76 Page Cabbott V. Radford yi Campbell v. Wilcox 31, 43, 44, 45, 80 Carpenter v. Snelling 31, 47 Cedar Rapids & St. Paul R. R. Co. V. Stewart 30 Chadwick w. Clarke 73 V. Sills 76 Ohaffe V. Ludeling 81 Chartiers and Robinson Turnpike Co. V. McNamara 31, 45, 81 Chicago Ry. T. Elevator Co. v. Inland Kev. Com'rs 74 Clapp 1-. Mason 109,111 Clark V. Gilbert 12 Clay V. Crofts 74 Clemens i;. Conrad 80 Clerk V. Blackstock 78 Coats V. Inland Rev. Com'rs 75 Ooblens v. Abel 13 Collector v. Day 47 V. Doswell 12 Combs V. Tuchelt 22, 23 Commonwealth's Appeal HI Commonwealth v. Mills 12 0. Nancrede 111 V. Sheckels 12 V. Williams 111 Cook V. Shearman 80 Coosaw Mining Co. v. State 1 Coppemoll I'. Ketcham 80 Coquitlam, The 1 Corder v. Drakeford 47 Corriew. Billiu 81 Corry Nat. Bank v. Rouse 47, 81 Craig V. Dimock 31, 80 Crews V. Farmers' Bank 31 Crisp V. Proud 11, 23 Cross V. People 80 Crowfoot V, Gurney 76 Cutting V. Gilbert 13 Dailey v. Coker D'Armond v. Dubose Davis V. Richardson Davy V. Morgan 81 80 31, 81 80 Vlll TABLE OF CASES CITED. DeLorme v. Ferk 80 Desmond v. Norris 44 D'Estrinoz v. Gerker 26 Diamond Match Co. ;;. United States 6 Diplock V. Hammond 74 Doe V. Amos 7e V. Day ■79 V. Fereday 79 V. Phillips 79 V. Wiggins 76, 79 Doffin V. Guyer 81 Dowell V. Applegate 43, 45, 47, 77 ])rury v. Macaulay 38 Dudley v. Wells 43,45 Duffy V. Hobson 31,81 Duvall V. English Evang. L. Church Ill Ellis V. Mason 38 Emery v. Hobson 32, 81 Eyre v. Jacob 109, HI Farquhar v. Southey 70 Firbiink v. Bell 39 First Nat. Bank v. Morsell 45,79 Fishwick v. Milnes 74 Forcheimer v. Holly 31, 81 Foster r. HoUey 36, 81 Fraser v. Kobinson 80 Frink v. Thompson 80 Galbraith v. Commonwealth 111 Gardner v. Walsh 78 Garish v. Hyman 81 Glen V. Dungey 79 Glidden v. Highbee 81 Gormely r. Gymnastic Ass'n 11 Govern v. Littlefield 43 Grand v. Cox 81 Grant v. Conn. Mut. L. Ins. Co. 43, 45 Green v. Hoi way 31, 43, 44, 45, 47, 80 Griffin v. Ranney 31, 80 r. Weatlierhy 39 Griffith V. Hirschfield 79 Gurr V. Scudds 73 Haight (1. Grist 31 Hale V. Wilkinson 80 Hall V. Jordan 80 Hallock V. Jan din 43 Hanford v. Obrecht 80 Harper v. Clark 43 Hathaway r. Fish 111 Hellman v. Reis 80 V. United States 109, 111 Henderson's Tobacco 28 Hetzell V. Gregory 80 Hill V. Ramm 74 Holt V. Board of Liquidators 31 Page Hoops V. Atkins 80 Hugus V. Strickler 31, 45 Humphreys v. Briant 74 Hunter v. Cobb 31, 44 Huttman, In re 12 Hyne v. Dewdney 74 Israel v. Israel 74 Jackson v. United States 23 Jacobs V. Cunningham 80 V. Hart 77 V. Spofford 80 James v. Blauvelt 80 Janvrin v. Fogg 82, 80 Jessup V. United States o7 Jewell V. Parr 39 Jones V. Blackwell 23 V. Jones 80 V. Simpson 76 Kaufman's Case 6, 11 Kennedy v. Morrison 80 Kennerley v. Nash 77 Kershaw v. Cox 77 Kile V. Johnson 81 Kinney v. Con. Virginia M. Co. 45, 80 Knill V. Williams 78 Lambert v. Whitelock Latham v. Rutley !'. Smith Lazarus i\ Cowie Leszynsky, In re License Tax Cases I..indauer, In re Logan V. Dils Lucas V. Beach Ludlofff. United States Lynch v. Morse 45 76 31, 44, 45 39 28 10, 11, 12, 44 13 45,80 74 23 43 McBride v. Doty McDowell I'. Addams McGovern v. Hoesback McGuire v. Commonwealth Mager v. Grinia Marine Ins. Co. c. Haviside Mason v. Clapp V. Sargent May V. Slack Maynard v. Johnson Melanotte v. Teasdale Mercer v. Mercer Merchants' Bank v. State Bank Mersey Docks and H. Board u. Inland Rev. Com'rs Miller v. Larmon V. Morrow V. Wentworth Mobile, etc. K. R. Co. v. Edwards Mogelin v. Westhoff 162 111 43 12 111 76 111 109, 110, 111 109, 111 45 74 80 80 75 80 45 81 81 81 TABLE OF CASES CITED. IX Moore v. Moore V. Quirk Morgan v. Graham Morley v. Culverwell Morris v. MoMorris Mjiers V. McGraw Page 31,81 45, 47, 81 81 76 31,81 81 13 Nelson v. Carman New Haven & Northampton Co. u. Quintard 43, 45 Northrup v. Shook 12 Outhwaite v. Luntley Owlsley V. Greenwood Oxford Iron Co. v. Spradley Pacific Bank v. De Eo Page V. Rives Pargoud v. Richardson Parker v. Dubois Patterson v. Gile 31 Pemberton v. Vaughn Penniford v. Hamilton People V, Gates Perry v. Bouchier Perryman v. Greenville Pervear v. Commonwealth Philadelphia v. Collector Piatt V. Broach Plessinger v. Depuy Plumley v. Massachusetts Prather v. Zulauf Pratt I'. Thomas Price I'. Thomas Pruessing v. Ing Pugh V. McCormick Pyle V. Partridge 78 81 81 80 110, 111 31,81 73 45, 46, 81 76 74 80 79 32, 81 11, n, 44 13 80 32 12 81 79 79 76 38, 46, 80 73 Quantity (A) of Distilled Spirits 46 Quantity (A) of Tobacco and Ci- gars 28, 55 V. Banks 111 Ransom o. United States 111 V. Brice 109 Rapp V. Allnutt 78 53,55 Reed v. Deere 76 V. Biizzo 31 Rees V. Jackson 80 V. Clare 11 Reg. V. Everdon 79 V. Cutting 12 Reis V. Hellman 81 V. Eaton 12 Kex V. Louth 79 V. Edwards 23 V. Weeks 79 V. Feigelstock 11 Rheinstrom v. Cone 30,81 V. Fielding 6 Rice V. United States 1 V. Fox 53 Ricord v. Jones 81 !•. Glab 11 Robinson w. Lair 36,80 V. Goldback 51,98 Rowell V. Inland Rev. Com'rs 75 ir. Griswold 43,45 Rowland v. Plummer 81 V. Hart 109, 111 Rushbrook v. Hood 79 V. Hazard V. Howard 109, 110 13 Salt Co. V. Wilkinson 11 V. Hunnewell 109 110, 111 Sammons v. Halloway 31,80 V. Ishani 30, 73, 77, 80 Sawyer v. Parker 80 Sohermerhorn v. Burgess 80 Scholey v. Rew 109, 111 Schultz V. Herndon 37, 46, 80 Scott, Ex parte 12 Selden o. Equitable Trust Co. 13 Semple v. Steinau 76 Sharpies v. Rickard 39 Shelton v. James 38 Shrivell v. Payne 38 Slack V. Tucker 11 Sohier v. Eldridge 110 Spear v. Alexander 80 Sporrer v. Eifler , 31, 80 State V. Hill 81 V. St. Louis County Court 110 Stewart v. Hopkins 81 Stolte V. Herndon 80 Straus V. Minzesheiraer 23 Sturges V. United States 109 Susong V. Williams 80 Swift Co. ./. United States 6 Taylor v. Duncan 36, 80 V. Steele 76 Tharp v. Commonwealth 111 Thomas v. Fenton 39 Thomson v. Advocate-General 110 Timp V. Dockham 81 Tobey v. Chipman 43, 45 Tucker v. Potter 80 v. Slack 11 Turner v. State 81 Tyson «. State 109,111 Underbill v. Pleasonton 6 Union Agricultural Ass'n v. Neill 32, 37, 46, 81 United States w. Allen 110 V. Baltimore, etc. R. R. Co. 79, 80 TABLE OF CASES CITED. Page United States v. Jacoby 23 V. Kaufman 6, 11 V. Kelly 109 V. Kenton 12 V. Keyes 28 V. Learned 45, 79, 80 V. Lererich 109, 111 V. Loup 28 V. McKee 81 46, 49, 116 V. Mena 21,23 V. Millard 23 V. Morris 109 V. Neid 23 V. Nelson 11 V. New York Life Ins. & T. Co. 109, 110, 111 V. 117 Packages of Tobacco 27 V. 133 Casks of Distilled Spirits 55,80 V. Pressy 11, 13 V. Quantity of Tobacco, A 28 V. liankin 109, 111 «. Simons 12 V. Smith 80 V. Stowell 1 V. Tappan 110, 111 109, 111 V. Truck 109 V. 236 Dozen Boxes contain- ing Cosmetics 53 V. Watts 109, no. 111 37 United States Express Co. u. Haines 31 Van Wickle v. Poydras 32, 80 Vauglian v. O'Brien 80 Vaughton v. Brine 74 Walker v. Roberts 38 Wallace v. Cravens 31, 81 Walton V. Hastings 78 Warren v. Shook 12, 15 W^aterbury v. McMillan 32, 43, 46, 81 Wayman v. Torreyson 31, 45 Weeks, In re 1 2 Weltners v. Riggs 31 Werbiskie v, McManus 80 Wesscls V. Beeman 23 West London Syndicate o. Inland Rev. Cnm'rs 75 Wliarton v. Walton 79 Wheatley v. Williams y>» Whigham v. Pickett 43, 45, 8(1 White, Ex parte 78 White V. North 74 Whitehill v. Shickle 43 Wilhelmi ?•. Wade 111 Williams' Case 109, 111 Wills V. Noot 76 Wilson !•. Justice 77 i: McKenna 80 V. Smith 79 Wolseley v. Cox 79 Works V. Hershey 81 Worthen, In re 12 Worthington v. Warrington 79 Wright V. Blakeslee 13, 111 Yates, Ex parte 78 THE WAR REYENUE LAW OF 1898 EXPLAINED. Sources of the La'w. — The War Eevenue Law of 1898 has been chiefly derived from the Revised Statutes of the United States, Title XXXV., and the amendments thereof, which may be found in volumes I. and II. of Gould and Tucker's Notes on the Revised Statutes; also from the follovving Acts of Congress: Act of July 1, 1862 (12 Stats. 432, 479, ch. 119, § 110) ; Act of March 3, 1863 (12 Stats. 713, 720, ch. 74, § 6) ; Act of June 30, 1864 (13 Stats. 223, ch. 173) ; Act of March 3, 1865, ch. 78, § 1 (Id. 469); Act of July 13, 1866, ch. 184 (14 Stats. 98); Act of June 23, 1874, ch. 462, § 1 (18 Stats. 260, ch. 462). The great prototype of the present law is the above Act of June 30, 1864, in which Congress, under stress of necessity and great war liabilities, showed remarkable capacity for devising means of taxation. General Principles. — Statutes of taxation are construed in favor of the tax payer, (a) Where the government is interested, statutory grants of property, franchises, or privileges will be strictly construed in its favor, (b) Statutes relating to frauds upon the revenue, through imposing penalties, are to be so construed as to carry out the intent, and not strictly in the defendant's favor, like penal laws, (c) Collection Districts. — The collection of the revenues of this law is intrusted to the Commissioner of Internal Revenue and his (a) American Net & Twine Co. v. Worthington, 141 XJ. S. 468; Rice v. United States, 5.3 F. R. 910. (6) Coosaw Mining Co. v. State, 144 TJ. S. 550. (c) United States v. Stowell, 133 U. S. 1 ; United States a. Brown, Beady, 566 ; The Coqnitlam, 57 F. R. 706. 1 2 THE WAR REVENUE LAW OF 1898. collectors and assistants, and the conntry is divided into the fol- lowing collection districts, under an executive order of May 21, 1887. The irregularity in numeration is caused by the retention of the original numbers of the districts with which others have been consolidated : — Alabama. Collector's office, Birmingham. Alaska. Attached to District of Oregon. Collector's office, Portland. Arizona. Attached to New Mexico. Collector's office, Santa Fe. Arkansas. Collector's office. Little Rock. California. First district, collector's office, San Francisco; fourth district, collector's office, Sacramento. Colorado. Including Wyoming. Collector's office, Denver. Connecticut. Including Rhode Island. Collector's office, Hartford. Delaware. Attached to Maryland. Collector's office, Baltimore. Florida. Collector's office, Jacksonville. Georgia. Collector's office, Atlanta. Idaho. Attached to Montana. Collector's office, Helena. Illinois. First district, collector's office, Chicago ; fifth district, Peo- ria; eighth district, Springfield; thirteenth district, Cairo. Indiana. Sixth district, collector's office, Lawrenceburgh ; seventh district, collector's office, Burlington. Iowa. Third district, collector's office, Dubuque; fourth district, collector's office, Burlington. Kansas. Including Indian Territory and Oklahoma. Collector's office, Leavenworth. Kentucky. Second district, collector's office, Owensborough ; fifth district, collector's office, Louisville; sixth district, collector's office, Cov- ington; seventh district, collector's office, Lexington; eighth district, collector's office, Richmond. Louisiana. Including Mississippi. Collector's office. New Orleans. Maine. Attached to New Hampshire. Collector's office, Portsmouth. Maryland. Including Delaware, District of Columbia, and two coun- ties of Virginia. Collector's office, Baltimore. Massachusetts. Collector's office, Boston. Michigan. First district, collector's office, Detroit; fourth district, collector's office. Grand Rapids. Minnesota. Collector's office, St. Paul, Mississippi. Attached to Louisiana. Collector's office, New Orleans. Missouri. First district, collector's office, St. Louis; sixth district, collector's office, Kansas City. Montana. Including Idaho and Utah. Collector's office, Helena. Nebraska. Including North Dakota and South Dakota. Collector's office, Omaha. Nevada. Attached to fourth district of California. Collector's office, Sacramento. New Hampshire. Including Maine and Vermont. Collector's office, Portsmouth. THE WAR EEVENUE LAW OF 1898, 3 New Jersey. First district, collector's office, Camden; fifth distiiot, collector's office, Newark. New Mexico. Including Arizona. Collector's office, Santa Fe. New York. First district, collector's office, Brooklj'n; second dis- trict. New York; third district. New York; fourteenth district, Albany; twenty-first district, Syracuse ; twenty-eighth district, Rochester. North Carolina. Fourth district, collector's office, Raleigh ; fifth district, collector's office, Asheville. North Dakota. Attached to Nebraska. Collector's office, Omaha. Ohio. First district, collector's office, Cincinnati ; tenth district, col- lector's office, Toledo; eleventh district, collector's office, Springfield; eighteenth district, collector's office, Cleveland. Oregon. Including Washington and Alaska. Collector's office, Port- land. Pennsylvania. First district, collector's office, Philadelphia; ninth district, collector's office, Lancaster ; twelfth district, collector's office, Scranton; twenty-third district, collector's office, Pittsburgh. Rhode Island. Attached to Connecticut. Collector's office, Hartford. South Carolina. Collector's office, Columbia. South Dakota. Attached to Nebraska. Collector's office, Omaha. Tennessee. Second district, collector's office, Knoxville ; fifth dis- trict, collector's office, Nashville. Texas. Third district, collector's office, Austin ; fourth district, col- lector's office, Dallas. Utah. Attached to Montana. Collector's office, Helena. Vermont. Attached to New Hampshire. Collector's office, Ports- mouth. Virginia. Second district, collector's office, Richmond ; sixth district, Lynchburg. Washington. Attached to Oregon. Collector's office, Portland. West Virginia. Collector's office, Parkersburg. Wisconsin. First district, collector's office, Milwaukee; second dis- trict, collector's office, Madison. Wyoming. Attached to Colorado. • Collector's office, Denver, (a) The War Revenue Law of 1898, entitled "An Act to provide -ways and means to meet -war expenditures, and for other purposes," provides by § 1 — " That there shall be paid, in lieu of the tax of one dollar now imposed by law, a tax of two dollars on all beer, lager beer, ale, porter, and other similar fermented (a) Eldridge, U. S. Int. Kev. System, p. 70 ; Rev. Stats. § 3141 ; Report of the Commissioner of Internal Eeveuue to the Secretary of the Treasury of August 8, 1898, pp. 7, 8. 4 THE WAR REVENUE LAW OF 1898. liquors, brewed or manufactured and sold, or stored in warehouse, or removed for consumption or sale, within the United States, by whatever name such liquors may be called, for every barrel containing not more than thirty-one gallons ; and at a like rate for any other quantity or for the fractional parts of a barrel author- ized and defined by law. And section thirty-three hundred and thirty-nine of the Revised Statutes is hereby amended accordingly : Provided, That a dis- count of seven and one-half per centum shall be allowed upon all sales by collectors to brewers of the stamps provided for the payment of said tax : Provided further, That the additional tax imposed in this section on all fermented liquors stored in warehouse to which a stamp had been affixed shall be assessed and collected in the manner now provided by law for the collection of taxes not paid by stamps." Sect. 3339 of the United States Revised Statutes is as follows: — ' ' There shall be paid on all beer, lager beer, ale, porter, and other similar fermented liquors, brewed or manufactured and sold, or removed for consumption or sale, within the United States, by whatever name such liquors may be called, a tax of one dollar for every barrel containing not more than thirty-one gallons; and at a like rate for any other quantity or for any fractional part of a bar- rel. In estimating and computing such tax, the fractional parts of a barrel shall be halves, thirds, quarters, sixths, and eighths; and anv fractional part of a barrel containing less than one-eighth shall be accounted one-eighth; more than one-eighth, and not more than one-sixth, shall be accounted one-sixth; more than one-sixth, and not more than one-fourth, shall be accounted one-fourth; more than one-fourth, and not more than one-third, shall be accounted one- third; more than one-third, and not more than one-half, shall be accounted one-half; more than one-half, and not more than one barrel, shall be accounted one barrel; and more than one barrel, and not more than sixty-three gallons, shall be accounted two bar- rels, or a hogshead. The said tax shall be paid by the owner, agent, or superintendent of the brewery or premises in which such THE WAR EEVENUE LAW OF 1898. 5 fermented liquors are made, and in the manner and at the time hereinafter specified." A special tax of one hundred dollars per year is imposed by Rev, Stats. § 3244 upon brewers who manufacture five hundred or more barrels per year, and of fifty dollars upon those who manufacture less than five hundred barrels. This tax is paid by means of stamps, and evidence of it must be posted in the brewer's place of business. By § 3335 he must give notice to the collector of his intention to begin business, which notice must contain a descrip- tion of the premises on which the brewery is situated; his name and the names of the members of the firm, if any ; the place of resi- dence of each; his or their title to the premises, and the name of the owner thereof. By § 3336, amended in 1886, at least once in four years he must give bond, that he will pay the internal revenue taxes, that he will keep a book hereinafter described, and that he will comply with the laws. In this book he must, by § 3337, enter from day to day the kind and estimated quantity produced in barrels, and the actual quantity sold, or removed for consumption or sale, and in a separate book an account of all materials purchased for the purpose of producing fermented liquors. On or before the tenth day of each month he must make a sworn statement to the collector from these entries of the estimated quantity brewed, and the actual quantity sojd or removed, and the entries must also be verified by oath. The tax is paid by means of stamps, and there can be no re- moval of the liquor from the brewery to the warehouse unstamped, without a permit of the collector. Eev. Stats. §§ 3342, 3345. The stamp affixed by the brewer is to be placed upon the spigot hole so that the stamp will be destroyed when the vessel is tapped. The stamp is cancelled by placing thereon the manufacturer's name or initials and the date of cancellation. Before the vessel can be sold or removed it must'^also, by § 3349, be marked with the name of the maker and place of manufacture. The only exception is where one brewer purchases from another malt liquor ready for sale, {a) If it is found that the brewer has failed to pay the tax or any part thereof, the Commissioner can, under § 3182, make an assess- ment for all liquor which has not paid the tax by stamps, which assessment is sent to the collector to collect. This manner of col- lecting is evidently that referred to in the last proviso of section one of the present Act. (S) Commissions to purchasers of internal (a) See Burroughs on Taxation, § 169 ; Eldridge, TJ. S. Int. Eev. Tax System, ch. 5 ; Rev. Stats. § 3335-3354, and amendments. (h) See Eev. Stats. § 3447. 6 THE WAR REVENUE LAW OF 1898. revenue stamps are to be paid in cash. The Commissioner has no power to pay them in stamps. Commissions are to be paid whether the purchaser pays cash or secures a credit of sixty days and gives bond, (a) This is important in connection with the next to the last proviso of section one. Brewers can sell from their brewery original stamped packages without paying a special tax as wholesale liquor dealers, (b) The word "gallon," wherever used in the internal revenue law, relating to beer, lager beer, ale, porter, and other similar fermented liquors, means "a wine gallon, the liquid measure containing two hundred and thirty-one cubic inches." (c) Where a brewer found that he had manufactured less than five hundred barrels during the year, and the Commissioner allowed him a refund of $50, the Court of Claims enforced this award, (d) The Commissioner may issue stamps for restamping packages of distilled spirits, tobacco, cigars, snuff, cigarettes, and fermented liquors which have been duly stamped, but from which the stamps have been lost or destroyed by unavoidable accident; (e) and mer- chandise stamps, when spoiled, destroyed, or rendered useless or unfit for the purpose intended, or for which the owner may have no use, or which through mistake may have been improperly or un- necessarily used, or when the rates or duties represented thereby have been excessive in amount, paid in error, or wrongfully col- lected, may, when the stamps have been returned to the Commis- sioner, or a satisfactory reason is given why they cannot be returned, be allowed for or redeemed. (/) (a) See § 3425; United States v. Fielding, 3 McCrary, 479 ; 17 'F. R. 572; Swift Co. V. United States, 111 U. S. 22; Diamond Match Co. v. United States, 31 F. R. 271 ; 24 Blatch. 442; Swift Co. v. United States, 105 U. S. 691 ; Beclitel V. United States, 101 U. S. 597. (6) Underbill v. Pleasonton, 8 Blatch. 260. (c) 20 Stats. 327, § 21 ; 16 A. G. Op. 361. (rf) United States v. Kaufman, 96 U. S. 567 ; Kaufman's Case, 11 Ct. CI. 659. (e) Rev. Stats. § 3315, amended by the Act of March 1, 1879 (20 Stats. 338) ; Eldridge, 306. (/) Rev. Stats. § 3426, amended by sec. 17 of the Act of 1879 (20 Stats. 349). THE WAE REVENUE LAW OF 1898. 7 Special Taxes. — " Sect. 2. That from and after July first, eighteen hundred and ninety-eight, special taxes shall be, and hereby are, imposed annually as follows, that is to say:" — Bankers shall pay $60 when emphying a capital not exceeding $25,000, and |2 additional for every 1 1,000 employed in excess of $25,000. " One. Bankers using or employing a capital not exceeding the sum of twenty-five thousand dollars shall pay fifty dollars ; when using or employing a capital exceeding twenty-five thousand dollars, for every addi- tional thousand dollars in excess of twenty-five thou- sand dollars, two dollars, and in estimating capital surplus shall be included. The amount of such annual tax shall in all cases be computed on the basis of the capital and surplus for the preceding fiscal year. Every person, firm, or company, and every incorporated or other bank, having a place of business where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order, or where money is advanced or loaned on stocks, bonds, bullion, bills of exchange, or promis- sory notes, or where stocks, bonds, bullion, bills of ex- change, or promissory notes are received for discount or sale, shall be a banker under this Act : Provided, That any savings bank having no capital stock, and whose business is confined to receiving deposits and loaning or investing the same for the benefit of its de- positors, and which does no other business of banking, shall not be subject to this tax." Brokers shall pay |50. " Two. Brokers shall pay fifty dollars. Every per- son, firm, or company, whose business it is to negotiate 8 THE WAR REVENUE LAW OF 1898. purchases or sales of stocks, bonds, exchange, bullion, coined money, bank-notes, promissory notes, or other securities, for themselves or others, shall be regarded as a broker : Provided, That any person having paid the special tax as a banker shall not be required to pay the special tax as a broker." Pawnbrokers shall pay " Three. Pawnbrokers shall pay twenty dollars. Every person, firm, or company whose business or oc- cupation it is to take or receive, by way of pledge, pawn, or exchange, any goods, wares, or merchandise, or any kind of personal property whatever, as security for the repayment of money loaned thereon, shall be deemed a pawnbroker." Commercial Brokers shall pay $20. " Four. Commercial brokers shall pay twenty dol- lars. Every person, firm, or company whose business it is as a broker to negotiate sales or purchases of goods, wares, produce, or merchandise, or to negotiate freights and other business for the owners of vessels, or for the shippers or consignors or consignees of freight carried by vessels, shall be regarded as a commercial broker under this Act." Custom-House Brokers shall pay $10. " Five. Custom-house brokers shall pay ten dollars. Every person, firm, or company whose occupation it is, as the agent of others, to arrange entries and other custom-house papers, or transact business at any port of entry relating to the importation or exportation of goods, wares, or merchandise, shall be regarded as a custom-house broker." THE WAR REVENUE LAW OF 1898. 9 Proprietors of Theatres, Museums, and Concert Halls shall pay $100. "Six. Proprietors of theatres, museums, and con- cert halls in cities having more than twenty-five thou- sand population as shown by the last preceding United States census, shall pay one hundred dollars. Every edifice used for the purpose of dramatic or operatic or other representations, plays, or performances, for ad- mission to which entrance money is received, not in- cluding halls rented or used occasionally for concerts or theatrical representations, shall be regarded as a theatre : Provided, That whenever any such edifice is under lease at the passage of this Act, the tax shall be paid by the lessee, unless otherwise stipulated between the parties to said lease." Proprietors of Circuses shall pay $100. " Seven. The proprietor or proprietors of circuses shall pay one hundred dollars. Every building, space, tent, or area where feats of horsemanship or acrobatic sports or theatrical performances are exhibited, shall be regarded as a circus : Provided, That no special tax paid in one State, Territory, or the District of Columbia shall exempt exhibitions from the tax in another State, Territory, or the District of Columbia, and but one spe- cial tax shall be imposed for exhibitions within any one State, Territory, or District." Proprietors or Agents for all Public Exhibitions or Shotvs for money not enumerated shall pay $10. " Eight. Proprietors or agents of all other public exhibitions or shows for money not enumerated in this section shall pay ten dollars : Provided, That a special tax paid in one State, Territory, or the District of 10 THE WAR EEVENUE LAW OF 1898. Columbia shall not exempt exhibitions from the tax in another State, Territory, or the District of Columbia, and but one special tax shall be required for exhibi- tions within any one State, Territory, or the District of Columbia." Proprietors of Bowling Alleys and Billiard Rooms shall fay for each Alley or Table |5. " Nine. Proprietors of bowling alleys and billiard rooms, shall pay five dollars for each alley or table. Every building or place where bowls are thrown or where games of billiards or pool are played, and that are open to the public with or without price, shall be regarded as a bowling alley or a billiard room, respectively." The above named special tax payers are liable to tax on and after July 1, 1898. (a) This section was chiefly taken from the occupation and privi- lege taxes in the Act of June 30, 1864, and of July 13, 1866. A "sovereignty may, in the discretion of its legislature, levy a tax on every species of property within its jurisdiction, or, on the other hand, it may select any particular species of property and tax that only, if in the opinion of the legislature that course will be wiser. What is true of property is true of privileges and occupations also; the State may tax all, or it may select for taxation certain classes and leave the others untaxed. Considerations of general policy determine what the selection shall be in such cases, and there is no restriction on the power of choice unless one is imposed by constitution. In another chapter it has been shown that consti- tutional provisions requiring the taxation of property by value have no application to the taxation of other subjects, and do not therefore, by implication, forbid the taxation now under con- sideration." (6) The special tax is similar to the license taxes of the States. A person wishing to engage in one of the occupations specially taxed (a) Circular No. 497, of June 25, 1898. (6) Cooley on Taxation {2d ed.), 570 ; Butler's Appeal, 73 Penn. St. 448- 451. On the constitutionality of such laws, see License Tax Cases, 5 Wall. 462. THE WAR REVENUE LAW OF 1898. 11 must register with the collector of his district his place of resi- dence, trade or business, and the place where the business is to be transacted. If there is a firm, the names of all its members are to be given. If more than one occupation is followed, whether at the same or different places, a tax is to be paid for each occupation or place of business. Stamps are procured from the collector. The stamps denoting the payment of the tax must be posted in some conspicuous position in the place of business, and the collector is required to keep in his office, in a prominent place for public in- spection, an alphabetical list of persons who have paid the special tax. The tax is for the year, and in case of the death of the party his representatives may continue the business without the payment of any additional tax; and so in case of removal of the place of business, (a) Such laws give no authority to carry on the licensed busi- ness within a State by whose laws it is prohibited. (6) The tax must be paid in advance, (c) The Commissioner has just ruled that merchandise brokers are commercial brokers, and are therefore subject to the special tax. He has also ruled that merchants, ware- housemen, auctioneers, and cattle brokers who receive goods, prod- uce of any kind, or live stock, are not commercial brokers, {d) When a firm has paid the special tax, and subsequently one of the partners purchases the entire interest, and becomes sole ovrner of the business, he may carry it on at the same place for the balance of the term for which the tax is paid without again paying such tax. (e) The paying of a special tax does not exempt a person from paying another special tax for doing business at a place other than that stated in the collector's register. (/) Wherever there is more than one pursuit liable to a special tax carried on at the same place and time, each is taxed, (gi) Every place of business must pay (a) Burr. Tax. 617, 618; Rev. Stats. §§ 3232-3244. On penalties, see Rev. Stats. § 3239. As to the meaning of the words " place where business is to be carried on," see Salt Co. v. Wilkinson, 8 Blatch. 30. (6) License Tax Cases, 5 Wall. 462. (c) United States v. Clare, 2 F. R. 55 ; 14 Phila. 543. {d) Commissioner's Rulings, July, 1898. (e) United States v. Glab, 99 U. S. 225 ; see United States v. Feigelstock, 14 Blatch. 321 ; Pervear v. Commonwealth, 5 Wall 475 ; United States ;;. Nelson, 29 F. R. 208 ; United States v. Kaufman, 96 U. S. 567 ; Kaufman's Case, 1 1 Ct. CI. 659 ; Gormely v. Gymnastic Assn., 13 N. W. Rep. 244 ; United States v. Pressy, 1 Lowell, 319. (/) Rev. Stats. § 3235; Crisp v. Proud, 4 Hughes, 57; Tucker v. Slack, Holmes, 485 ; Slack v. Tucker, 23 Wall. 321. {(}) Rev. Stats. § 3236; Crisp v. Proud, 4 Hughes, 57. 12 THE WAE REVENUE LAW OF 1898. a special tax, but a place where goods are stored or manufactured, and not sold, need not be paid for in addition, (a) Regulations made by the Commissioner have the force of statutes respecting the assessment and collection of taxes, (b) Special tax payers must render their returns to the collector within the calendar month in which liability began, except in case of sickness or absence, (c) Instructions have also been sent out to the different collectors by the Commissioner that the special tax payers must pay the special tax before July, 1898, ends. Notice must be given to the collector of death, change, or removal, (d) If, upon the dissolution of an old firm, a new one takes its place, there must be a new special tax. (e) It has just been decided by the Commissioner that under the present Act bucket-shop proprietors giving memoranda of trans- actions are required to pay a special tax as brokers, and that a club need not pay a special tax for its billiard and pool tables. (/) The list of special tax payers includes bankers, brokers, commercial brokers, pawnbrokers, custom-house brokers, proprietors of theatres, museums, concert halls, circuses, public exhibitions, bowling al- leys, billiard rooms, shows for money, dealers in leaf tobacco, dealers in tobacco, manufacturers of tobacco, manufacturers of cigars, deal- ers in oleomargarine, manufacturers of oleomargarine, brewers, rectifiers, dealers in malt and spirituous liquors, refiners of sugar, refiners of petroleum, manufacturers or packers of mixed flour. ((/) A State law taxing or prohibiting a business already taxed by Congress is constitutional. (Ji) If a man intends to pay the tax, (a) Rev. Stats. § 3235: 18 Int. Kev. Rec. 81 ; 19 Id. 153; 22 Id. 157. (i) In re Huttman, 70 F. R. 699 ; In re Weeks, 82 F. R. 729. (c) Rev. Stats. § 3237, as amended by § 53, Act of October 1, 1890. (d) Ibid. § 3241. (e) Decision No. 178, Int. Rev. Reg. Series 7, No. 1, p. 30. (/) Commissioner's Ruling, No. 22, of July 13, 1898. {(j) Rev. Stats. Title 35, ch. 3, and the present Act. On bankers doing busi- ness as brokers, see Clark v. Gilbert, 5 Blatch. 330 ; Northrup v. Shook, 10 Blatch. 243 ; 4 Int. Rev. Rec. 42 ; 11 A. G. Op. 482 ; United States v. Cutting, 3 Wall. 441, 445 ; Collector v. Doswell, 16 Wall. 156 ; Warren v. Shook, 91 U. S. 704. On stock brokers, see Clark v. Gilbert, 5 Blatch. 330; Northrup v. Shook, 10 Blatch. 243 ; United States v. Cutting, 3 Wall. 441 ; Collector v. Doswell, 16 Wall. 156. On cattle brokers, see United States v. Kenton, 2 Bond, 97. On produce brokers, see United States v. Simons, 1 Abb. U. S. 470; 7 Phila. 607. (h) Rev. Stats. § 3243 ; Pervear v. Commonwealth, 5 Wall. 475 ; McGuire v. Commonwealth, 3 Wall. 387 ; License Tax Cases, 5 Wall. 462 ; Commonwealth 0. Sheckels, 78 Va. 36; Commonwealth v. Mills, 157 Mass. 405; Plumley c^. Massachusetts, 155 U. S. 461, 466; United States v. Eaton, 144 U. S. 677 ; 37 Int. Rev. Rec. 77, 229 ; In re Worthen, 58 F. R. 467 ; Ex parte Scott, 66 Id. 45. THE WAR REVENUE LAW OF 1898. 13 and the officers give him a few days' indulgence, this will not sub- ject him to the penalty, (a) The extent of the liability incurred by carrying on a business subject to a special tax without having paid the tax is explained in the cases cited in the note, (b) A public driving-park is held not to be a theatre, show, etc. (c) A person in possession and control of a billiard table is liable for the tax. (d) A corporation whose business is confined to the invest- ment of its capital in bonds secured by a mortgage on real estate, and to the negotiation, sale, and guaranty of them, is not a bank or banks within the meaning of Eev. Stats. § 3407. (e) The sell- ing of its own stocks, bonds, etc., does not make of a company a banking institution. (/) An action for money had and received is maintainable against a collector of internal revenue for duties or taxes erroneously or ille- gally assessed and collected when the payment has been made under protest and with notice of an intention to bring a suit to test the validity of the claim. ([/) There is no strict rule that a protest against the exaction of an excessive internal revenue tax must be in writing or in any particular form. Some sort of protest is nec- essary, but any which shows that the payment is not voluntarily made is sufficient to save the right of suing to recover it back. (A) Under Rev. Stats. § 3226, providing that "no suit shall be maintained in any court for the recovery of any internal tax alleged to have been erroneously or illegally assessed or collected," "until appeal shall have been duly made to the Commissioner of Internal Revenue," and "a decision of the Commissioner has been had thereon," an action cannot be maintained against a collector for an illegal assessment made and collected until an appeal has been taken to the Commissioner of Internal Revenue, who must render his decision therein within six months from the date of such appeal, (i) Sections 3226, 3227 further provide that if such decision is de- layed more than six months from the date of such appeal, then the (a) United States v. Pressy, 1 Lowell, 319. (b) 22 Int. Eev. T!ec. 138 ; In re Lindauer, 7 Blatch. 249. (s) 25 Int. Rev. Eec. 359. (J) United States v. Howard, 1 Sawyer, 507 ; 13 Int. Rev. Rec. 118. (e) Selden v. Equitable Trust Co., 94 U. S. 419. (/) Ibid. ig) Philadelphia v. Collector, 5 Wall. 720 ; Cutting v. Gilbert, 5 Blatch. 259 ; Nelson v. Carman, Id. 511. (A) Wright I'. Blakeslee, 101 U. S. 174. (0 Coblens v. Abel, Woolw. 293. 14 THE WAR REVENUE LAW OF 1898. said suit may be brought, without first having a decision of the Commissioner, at any time within two years from the time the cause of action first accrued, and when the matter is pending before the Commissioner, within one year after such decision. In, Circular No. 508, of August 8, 1898, the Commissioner has just issued the following special tax rulings : — 1. Banks. — Undivided profits should be considered as surplus in estimating the tax due from hanks, the amount to be estimated by taking the average for the preceding year. 2. Private banks having no capital stock are subject to tax as bankers. 3. In computing special tax of banks whose capital exceeds $25,000, if excess is less than $1,000, it is not to be considered. 4. In estimating the amount of special tax to be paid by a bank, based upon capital and surplus, the amount invested in United States bonds is not to be deducted. 5. The amount invested by a bank in the bank building is not to be deducted from capital and surplus. 6. A bank in liquidation, doing no business except collecting and dividing assets in closing, is not required to pay special tax. 7. A bank engaged in business in the month of July must pay special tax for the entire year beginning July 1, 1898. 8. A trust company is liable as a banker if it comes within any one of the three clauses of definition in paragraph 1, section 2, of the Act, viz. : — "Every person, firm, or company, and every incorporated or other bank, having a place of business where credits are opened by the deposit or collection of money or currency, subject to be paid or re- mitted upon draft, check, or order, or where money is advanced oi loaned on stocks, bonds, bullion, bills of exchange, or promissory notes, or where stocks, bonds, bullion, bills of exchange, or promis- sory notes are received for discount or sale." 9. Borrowed capital must be taken into account when estimating amount of special tax required from bankers. 10. It is not the subscribed capital, but the capital actually em- ployed during the preceding fiscal year, that is to be taken as the basis for estimating the special tax required to be paid. 11. Brohers. — The loaning of money for one's self or for others, on commission, does not subject the lender to special tax as a broker; but if a person makes it a business to negotiate purchases or sales of stocks, bonds, exchange, bullion, coined money, bank notes, THE WAR REVENUE LAW OF 1898. 15 promissory notes, or other securities, for himself or others, he is re- quired to pay the special tax as a broker. " It is only when making sales and purchases in his business, his trade, his profession, his means of getting his living, or making his fortune, that he becomes a broker within the meaning of the statute." (Warren et al. v. Shook, 91 U. S. 704.) 12. Persons- or firms acting as agents for resident or non-resident parties, loaning money upon promissorj' notes, secured by mort- gages, are not brokers within the meaning of the Act, and are not liable to the special tax provided for brokers. 13. A lawyer can make investments for clients without being liable, unless he does it to such an extent that it can be called a "business." 14. Loan and mortgage companies are not liable as brokers for loaning money on notes or bonds secured by mortgage or trust deed on real estate. If they purchase notes, bonds, or other securities, they become liable as brokers. 15. Persons whose practice it is to buy fee bills of witnesses are not brokers. Such paper is not properly described by any of the terms used in the law, to wit, "stocks, bonds, exchange, bullion, coined money, bank notes, promissory notes, or other securities." 16. A person engaged in the business of placing loans which are secured by notes and mortgages upon real estate, acting simply as agent for the party furnishing the money, receiving a commission for his services in obtaining the application for the loan and attend- ing to the execution of the papers, is not a broker. 17. A person engaged in the business of selling real estate, acting as the agent of the owner in finding purchasers and receiving a commission for his services, is not a broker. 18. When persons "shave notes " or negotiate purchases or sales of promissory notes, if these are only occasional acts and do not constitute their regular business, they are not brokers within the meaning of the Act. 19. Bucket-shop proprietors giving memorandum of transactions are required to pay special tax as brokers. 20. If an agent transacts the general business of a broker for the principal, paying over moneys to the customers, etc., the special tax of $50 must be paid for the place where this business is done, and the requisite stamp posted up therein. This tax may be paid by the principal himself, and the stamp taken out in his name (which is preferable), or it may be paid by the agent and the stamp taken out in his name. The principal special-tax stamp for his place of business in an- 16 THE WAR EEVENUE LAW OF 1898. other city covers the transactions only at that place of business, and cannot cover the business done elsewhere at a branch office. 21. Broker's tax is not required to be paid at branch offices where a clerk is employed, whose sole duty is to receive orders and trans- mit them by wire to the head of the office. The mere receipt and transmission by clerks of orders is not regarded as the carrying on the business of a broker. 22. Commercial Brokers. — Commercial brokers, within the meaning of the act, are those persons only who, without having in their possession goods, wares, or merchandise, negotiate sales or purchases thereof on commission. 23. Commission merchants who receive goods in possession to sell for others are not commercial brokers within the meaning of the statute. 24. Cattle brokers, who receive and sell cattle on commission, aro not required to pay special tax as commercial brokers. 25. A person who is employed by certain firms to solicit and re- ceive orders, on commission, for their goods, and is bound by his agreement with them to give his entire services to them to the ex- clusion of other firms or persons, is not regarded as a commercial broker within the meaning and intent of the law. 26. Warehousemen who receive tobacco, cotton, or any other produce or goods on consignment, for sale on commission, are not liable as commercial brokers. 27. Auctioneers who receive and sell goods at their auction rooms or on the premises of the owners, on commission, are not subject to special tax as commercial brokers. 28. Drug brokers are properly included under the head of com- mercial brokers, and are subject to the special tax of $20. 29. If cotton buyers have possession of cotton which they sell, they are not liable as commercial brokers. If they have not, and sell on commission, they are liable. 30. Pawnbrokers. — A person is not required to pay a special tax as a pawnbroker for rare or occasional acts, which cannot be regarded as his business or occupation. 31. Ciistow,-house Brokers. — If the complete business of custom- house brokers is transacted by parties at offices at different ports of one district, a separate and distinct special tax must be paid for each of their offices, under the provisions of section 3235, Revised Statutes, which apply as well to special taxes under the war revenue Act as to all other special taxes. 32. Billiards. — Social clubs open only to members are not re- quired to pay special tax on billiard tables, but if liquor is sold to members they are liable to special tax as retail liquor dealers. THE WAE REVENUE LAW OF 1898. 17 33. Theatres, Museums, etc. — Persons are not required to pay special tax for the mere occasional renting of their hall for public performances to dramatic companies or other persons charging en- trance money therefor, but the special tax of SIO is required to be paid by such persons or companies if they give dramatic perform- ances or the other exhibitions specifically mentioned in paragraph 8, section 2, of the Act. 34. Where theatres are entirely closed to performances during the months of July and August, and only open in the month of September, the special tax is to be reckoned from the 1st day of September to the 1st day of July following, at the rate of $100 for the year beginning July 1. 35. Circuses and Theatrical Performances. — Exhibitions of feats of horsemanship (such as are seen in circuses), which occur on race tracks, are subject to a special tax of $100 ; but mere tests of speed of horses in racing are not regarded as "feats of horse- Tnanship " within the meaning of paragraph 7 of section 2, Act of June 13, 1898. 36. Variety shows, whether given at summer resorts or else- where, which include "acrobatic sports," come within the defini- tion of a circus in the statute which requires special tax therefor. 37. When a circus is exhibiting in any State in the month of July, the special tax of $100 is required to be paid for the year beginning July 1. If in the following month the circus goes into another State, the special tax at the r.ate of $100 for the year is to be reckoned from the 1st day of August to the 1st day of July fol- lowing, and a separate special tax stamp must be taken out accord- ingly for that State, and so on. 38. The "theatrical performances " contemplated by paragraph 7, section 2, of the Act of June 13, 1898, are only those which are given in connection with a circus. A theatrical companj"-, there- fore, merely playing dramas in towns of 25,000 inhabitants (as shown by the last census), or less, or in buildings whose proprie- tors do not hold the $100 special tax stamp, is required to pay special tax under paragraph 8, viz., $10 for each State for the special tax year, if the liability begins in the month of July, and at that rate when the liability begins in any other month than July- 39. Agricultural associations are required to pay a special tax at rate of $10 for exhibitions, including horse racing. Exhibitions of speed of horses on race track do not constitute circus. 40. Exhibitions and shows given on fair grounds, but not under 2 18 THE WAR EEVENUE LAW OF 1898. management and control of the fair association holding special tax stamp, are required to pay separate special tax. 41. Public Exhibitions or Shows. — A lecturer using a stereop- ticon to illustrate his lectures, and charging an admission fee, is liable to the special tax of $10 on a public exhibition or show for money. 42. If an exhibition is given in more than one State, the law requires payment of special tax for every such State, and that a separate stamp shall be taken out for each State. 43. The ordinary church or Sunday school entertainment, with- out any hired performers, does not come under the head of public exhibitions or shows for money contemplated by the law. 44. Amateur theatrical exhibitions, either in jsrivate houses or licensed public halls, for church or charitable benefits, are not such performances as are subject to tax. 45. Concert gardens where no admission is charged, but where beer and other drinks are sold and concerts are given, are within the meaning of paragraph 8 of section 2 of the Act, and the special tax of SIO must be paid therefor, unless the concert includes "feats of horsemanship or acrobatic sports or theatrical performances," in which case the special tax of SlOO must be paid. 46. Exhibitions of Edison's kinetoscopes require payment of a special tax of $10 in each State where such exhibitions are had. 47. A special tax stamp cannot be transferred to a successor in business except that in case of death, the wife, child, executor, administrator, or legal representative may carry on the business until the year expires, in the same house and upon the same prem- ises without payment of any additional tax. In cases where a firm composed of two or more members is dissolved, one or more mem- bers of the firm can carry on the business without procuring a new- special tax stamp, but the change of the personnel of the firm should be registered with the collector. If a new member is ad- mitted into the firm, a new special tax stamp is required. There is no provision of law under which any refund can be made on ac- count of the discontinuing of business prior to the close of the special tax year. 48. Section 31 of the Act of June 13, 1898, provides that "all administrative, special or stamp provisions of law, including the laws in relation to the assessment of taxes, not heretofore specifi- cally repealed, are hereby made applicable to this Act." Collectors will proceed as provided in section 3176, Eevised Statutes, as amended, in case of neglect or refusal to make return, or in case of false or fraudulent returns. THE "WAR REVENUE LAW OF 1898. 19 " Tobacco, Cigars, Cigarettes, and Snuff. — Sect. 3. That there shall, in lieu of the tax now imposed by law, be levied and collected a tax of twelve cents per pound upon all tobacco and snuff, however prepared, manufactured, and sold, or removed for consumption or sale ; and upon cigars and cigarettes which shall be manufactured and sold, or removed for consumption or sale, there shall be levied and collected the following taxes, to be paid by the manufacturer thereof,, namely, a tax of three dollars and sixty cents per thousand on cigars of all descriptions made of tobacco, or any sub- stitute therefor, and weighing more than three pounds per thousand, and of one dollar per thousand on cigars made of tobacco or any substitute therefor, and weigh- ing not more than three pounds per thousand ; and a tax of three dollars and sixty cents per thousand on cigarettes made of tobacco or any substitute therefor, and weighing more than three pounds per thousand ; and one dollar and fifty cents per thousand on cigar- ettes made of tobacco or any substitute therefor, and weighing not more than three pounds per thousand : Provided, That in lieu of the two, three, and four ounce packages of tobacco and snuff now authorized by law, there may be packages thereof containing one and two- thirds ounces, two and one-half ounces, and three and one-third ounces, respectively, and in addition to pack- ages now authorized by law, there may be packages containing one ounce of smoking tobacco. "And there shall also be assessed and collected with the exceptions hereinafter in this section provided for, upon all the articles enumerated in this section which were manufactured, imported, and removed from fac- tory or custom-house before the passage of this Act 20 THE WAR REVENUE LAW OF 1898. bearing tax stamps affixed to such articles for the pay- ment of the taxes thereon, and cancelled subsequent to April fourteenth, eighteen hundred and ninety-eight, and which articles were at the time of the passage of this Act held and intended for sale by any person, a tax equal to one-half the difference between the tax already paid on such articles at the time of removal from the factory or custom-house and the tax levied in this Act upon such articles. " Every person having on the day succeeding the date of the passage of this Act any of the above-de- scribed articles on hand for sale in excess of one thou- sand pounds of manufactured tobacco and twenty thou- sand cigars or cigarettes, and which have been removed from the factory where produced or the custom-house through which imported, bearing the rate of tax pay- able thereon at the time of such removal, shall make a full and true return under oath in duplicate of the quantity thereof, in pounds as to the tobacco and snuff and in thousands as to the cigars and cigarettes so held on that day, in such form and under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may pre- scribe. Such returns shall be made and delivered to the collector or deputy collector for the proper internal- revenue district within thirty days after the passage of this Act. One of said returns shall be retained by the collector and the other forwarded to the Commissioner of Internal Revenue, together with the assessment list for the month in which the return is received, and the Commissioner of Internal Revenue shall assess and col- lect the taxes found to be due, as other taxes not paid by stamps are assessed and collected. THE WAR EEVENUE LAW OF 1898. 21 "And for the expense comiected with the assessment and collection of the taxes provided by this Act there is hereby appropriated the sum of one hundred thou- sand dollars, or so much thereof as may be required, out of any moneys in the Treasury not otherwise appropriated, for the employment of such deputy col- lectors and other employees in the several collection districts in the United States, and such clerks and employees in the Bureau of Internal Revenue as may, in the discretion of the Commissioner of Internal Rev- enue, be necessary for a period not exceeding one yearj to be compensated for their services by such allowances as shall be made by the Secretary of the Treasury, upon the recommendation of the Commissioner of In- ternal Revenue. And the Commissioner of Internal Revenue is authorized to employ ten agents, to be known and designated as internal-revenue agents, in addition to the number now authorized in section thirty-one hundred and fifty-two of the Revised Stat- utes as amended, and the existing provisions of law in all other respects shall apply to the duties, com- pensation, and expenses of such agents." This section is derived from the Acts of July 20, 1868 ; of June 6, 1872; of March 3, 1883, ch. 121; and is in addition to chapter 7, Title 35, of the Revised Statutes. The term "cigar" includes cigarettes and cheroots, (a) The interpretation hy the Commissioner of the first proviso of section three is that the two, three, and four ounce packages of tohacco or snuff are no longer authorized, (b) By the Rev. Stats. § 3387, as amended, every person who wishes to pursue the occupation of a cigar manufacturer must file in duplicate with the collector a state- ment showing the place of manufacture, and if the goods are to he manufactured for another, the latter's name, residence, and occu- (a) Rev. Stats. §3387 ; United States v. Mena, 29 Int. Rev. Rec. 190. (h) Circular No. 49.5 of June 14, 1898. See Appendix. 22 THE WAR REVENUE LAW OF 1898. pation. He must give a bond conditioned that he will not defraud the government of any tax; that he will render correctly all re- turns, statements, and prescribed inventories; that he will stamp the cigars he manufactures, and that he will not knowingly sell or purchase any cigars not stamped as required by law; and wiU in all respects comply with the law. By §§ 3238, 3239 he must pay the special tax by means of stamps, and the evidence of the pay- ment must be posted conspicuously in his place of manufacture. All this must be done before he can begin business. By § 3388 he must display an outside sign giving his name and business. By §3390 he must annually deliver to the collector a true inventory verified by oath of his stock, showing what portion of the goods were manufactured and what portion purchased from others ; and he is to make daily entries in a book, stating all articles so purchased by him, and the quantity manufactured, sold, con- sumed, or removed; and before the tenth of each month he must furnish to the collector a true and accurate abstract of his pur- chases, sales, and removals. By § 3392, as amended, cigars are to be packed in specified quantities in boxes not before used for that purpose. On every box there must, by § 3393, as amended, be a label stating the number of the factory, and the district and State in which it is situated; also giving notice that he has complied with the law and cautioning every person not to use the box again for cigars, or the stamp thereon, nor to remove the contents of this box without destroying said stamp. Imported cigars are to pay the same internal revenue tax as domestic, in addition to the customs, (a) When a box is emptied of cigars it is the duty of the person into whose hands the box is to utterly destroy the stamp thereon, (b) By § 3385, as amended, cigars may be exported abroad without payment of the tax under certain conditions. Cigarettes must be put up in packages con- taining ten, twenty, fifty, or one hundred cigarettes each, (f) By § 3371, as amended, if the tax or any part of it is not paid by means of stamps, the Commissioner may assess the deficiency, and this is put into the hands of the collector to collect, and is in addition to the penalties incurred. The absence of a stamp is prima facie evidence that the tax has not been paid, (d) A sale of unstamped cigars will not be invalid if as a part of the (a) Rev. Stats. § 3402 ; S. T. D. (1891), p. 908; 17 Int. Eev. Eec. 126. (6) Rev. Stats. § 3406. See Combs v. Tuchelt, 24 Minn. 423 ; S. T. D. (1897), p. 617; 16 A. G. Op. 443. (c) Rev. Stats. § 3392, aa amended by § 32, Act of Oct. 1, 1890. v {d) Rev. Stats. § 3398. THE WAR REVENUE LAW OF 1898. 23 transaction it was contemplated that they should be stamped before removal, (a) Tobacco which was shipped from a factory to an ex- port bonded warehouse on the 14th of June, 1872, was subject to a tax of 32 cents per pound, as prescribed by the Statute of July 20, 1868, although such tobacco was not shipped from said warehouse until after July 1, 1872, and the Act of June 6, 1872, provided that on and after July 1, 1872, there shall be a tax on manufac- tu.red tobacco of 20 cents per pound, {b) Manufacture of cigars and tobacco, and sale of cigars and manufactured tobacco at retail, cannot be lawfully carried on at the same time in the same place, (c) If a retail dealer sells cigars not properly boxed and stamped, he is liable to the penalty, {d) The removal of cigars from the back part of a room, where they are manufactured, to the front part where they are sold, without first branding and stamping them, is an infringement (e) of the law. (/) A cigar manufacturer cannot retail cigars from his fac- tory. ((?) It will be presumed that cigars were removed in the condition in which they were found, (/i) Cigars cannot, be taken out of boxes and put back again, even if the Commissioner author- izes it, unless new stamps are added, (i) " Tobacco Dealers and Manufacturers. — Sect. 4. That from and after July first, eighteen hundred and ninety-eight, special taxes on tobacco dealers and man- (a) Combs v. Tuchelt, 24 Minn. 423; Crisp v. Proud. 4 Hughes, 57 ; United States V. Mena, 29 Int. Rer. Rec. 190 ; Straus r. Minzesheimer, 78 111. 493. See Ludloff V. United States, 108 U. S. 176. {h) Jones v. Blackwell, 100 U. S. 599 ; 14 A. G. Op. 110. (c) 16 A. G. Op. 89. (d) Rev. Stats. §3392; United States v. Edwards, 17 Int. Eev. Rec. 126; Ludloff V. United States, 108 U. S. 176, 183 ; United States v. Mena, 29 Int. Eev. Eec. 190. (e) On other infringements see Jackson u. United States, 22 Blatch. 353 ; United States v. Jacoby, 12 Blatch. 491. Concerning sales of goods not stamped, see Wessels v. Beeman, 66 Mich. 343 ; 87 Id. 481. (/) United States v. Neid, 8 Phila. 169 ; 13 Int. Eev. Eec. 28 ; United States V. Edwards, 17 Id. 126; Ludloff v. United States, 108 U. 8. 176. See United States V. Millard, 13 Blatch. 534. ig) Crisp v. Proud, 4 Hughes, 57. (/i) Jackson v. United States, 22 Blatch. 353. (i) 25 Int. Rev. Rec. 132; 15 A. G. Op. 516; Crisp v. Proud, 4 Hughes, 57; 16 A. G. Op. 443. 24 THE WAR REVENUE LAW OF 1898. ufacturers shall be and hereby are imposed annually as follows, the amount of such annual taxes to be com- puted in all cases on the basis of the annual sales for the preceding fiscal year : "Dealers in leaf tobacco whose annual sales do not exceed fifty thousand pounds shall each pay six dollars. Dealers in leaf tobacco whose annual sales exceed fifty thousand and do not exceed one hundred thousand pounds shall pay twelve dollars, and if their annual sales exceed one hundred thousand pounds shall pay twenty-four dollars. " Dealers in tobacco whose annual sales exceed fifty thousand pounds shall each pay twelve dollars. " Every person whose business it is to sell, or offer for sale, manufactured tobacco, snuff, or cigars shall be regarded as a dealer in tobacco : Provided, That no man- ufacturer of tobacco, snuff, or cigars shall be required to pay a special tax as dealer in manufactured tobacco and cigars for selling his own products at the place of manufacture. " Manufacturers of tobacco whose annual sales do not exceed fifty thousand pounds shall each pay six dollars. " Manufacturers of tobacco whose annual sales ex- ceed fifty thousand and do not exceed one hundred thousand pounds shall each pay twelve dollars. " Manufacturers of tobacco whose annual sales ex- ceed one hundred thousand pounds shall each pay twenty-four dollars. " Manufacturers of cigars whose annual sales do not exceed one hundred thousand cigars shall each pay six dollars. " Manufacturers of cigars whose annual sales exceed THE WAR REVENUE LAW OF 1898. 25 one hundred thousand and do not exceed two hundred thousand cigars shall each pay twelve dollars. " Manufacturers of cigars whose annual sales exceed two hundred thousand cigars shall each pay twenty- four dollars. " And every person who carries on any business or occupation for which special taxes are imposed by this Act, without having paid the special tax herein pro- vided, shall, besides being liable to the payment of such special tax, be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not more than five hundred dollars, or be imprisoned not more than six months, or both, at the discretion of the court." Dealers in leaf tobacco shall pay |6, |12, and $24, as follows : — Annually selling not exceeding 50,000 pounds .... $6.00 Annually selling exceeding 50,000 pounds, but not 100,000 12.00 Annually selling exceeding 100,000 pounds 24.00 Dealers in tobacco whose annual sales exceed 50,000 pounds shall pay %Vl. Manufacturers of tobacco shall pay .|6, $12, and $24, as follows : — Annually selling not exceeding 50,000 pounds .... $6.00 Annually selling exceeding 50,000 pounds, but not 100,000 12.00 Annually selling exceeding 100,000 pounds 24.00 Manifaciurers of cigars shall pay $6, $12, and $24, as follows : — Annually selling not exceeding 100,000 cigars . . . . $6.00 Annually selling exceeding 100,000 cigars, but not 200,000 12.00 Annually selling exceeding 200,000 cigars 24.00 The above named special tax payers are liable to tbe tax on and after July 1, 1898. (a) (a) Circular, No. 497. 26 THE WAR REVENUE LAW OF 1898. This section adds to and amends Rev. Stats. § 3244, clauses 6-10, as amended. It is chiefly taken from the Acts of July 20, 1868, ch. 186 (15 Stats. 125), and of June 6, 1872, ch. 316 (17 Stats. 231). Persons who engage in the manufacture of tobacco or snuff must furnish the collector a statement in duplicate (a) showing the place of manufacture; the number of cutting machines, presses, snuff- mills, hand-mills, or other machines ; the name, kind, and quality of the article manufactured or proposed to be manufactured; and if an agent or under contract, the name, residence, and occupation of the principal or person contracted with. He must give bond (J) in amount determined by the collector of the district, that he will not defraud the government of any tax; that he will render truly and completely all returns, statements, and inventories ; that when he adds to his machines, he will notify the collector; that he will stamp in accordance with law all his tobacco and snuff before re- moval ; that all manufactured tobacco or snuff that he sells or buys shall be duly stamped, and that he will comply with the law. The special tax must be paid by means of stamps, and evidence of it posted in a conspicuous place in the factory, (c) A certificate of the kind and number of cutting machines, etc., from the collector is to be posted in a conspicuous place in the manufactory, (d) The manufacturer must display an outside sign giving his full name and business, (e) and each year he must give the collector on oath a true inventory of his stock, what is manufactured and what is purchased ; this must be certified to by the collector, who makes an examination thereof, and the manufacturer must make from day to day entries of articles purchased, the quantity put forth, and the number of net pounds of lumps of plug tobacco made in the lump room and of packages and pounds thereof produced in the press room each day. (/) This enables the revenue officers to determine whether materials purchased are accounted for, and furnishes in- formation for making deficiency assessments. All snuff was required by the Rev. Stats. § 3362, as amended, to be put up in packages containing one-half, one, two, three, four, (a) Rev. Stats. §3335, as amended by the Act of March 1, 1879 (20 Stats. 327). (5) Ibid. (c) Ibid. §§ 3238, 3239. As to the definition of " manufacturers of tobacco," see 40 Int. Rev. Rec. 277, 405 ; D'Estrinoz v. Gerker, 43 P. R. 285. As to deal- ers in tobacco, see Rev. Stats. § 3360, as amended by the Act of March 1, 1879, and §§ 26, 27 of the Act of Oct. 1, 1890 (26 Stats. 567). (d) Rev. Stats. § 3355. (e) Ibid. § 3356. (/) Ibid. § 3358. THE WAR REVENUE LAW OF 1898. 27 six, eigbt ounces each, or in bladders and in jars containing not exceeding twenty pounds, (a) All fine cut chewing-tobacco, and all other kinds of tobacco not otherwise provided for, are to be put up in packages containing one, two, three, four, eight, and sixteen ounces each, except that fine cut chewing-tobacco may, at the option of the manufacturer, be put up in wooden packages containing ten, twenty, forty, and sixty pounds each, (b) All smoking-tobacco, and all cut and granulated tobacco other than fine cut chewing, all shorts, the refuse of fine cut chewing, which has passed through a riddle of thirty-six meshes to the square inch, and all refuse, scraps, clippings, cuttings, and sweepings of tobacco, must be put up in packages containing two, three, four, eight, and sixteen ounces each, and of smoking tobacco there can be one ounce pack- ages as well as the foregoing, (c) All cavendish, plug, and twist tobaccos are to be put up in wooden packages not exceeding two hundred pounds net weight. There are certain exceptions to this mode of packing where export abroad is intended, (d) The factories in the district are numbered, and the name, resi- dence, the place of manufacture, and number of the manufactory, are kept on record by the collector, (e) Packages cannot be used a second time, (/) and must have on them a label with the number of the factory, the district and State where located, and a notice that the manufacturer of this tobacco has complied with the law, and every person is cautioned not to use this package for tobacco again; (p') and if a wooden package, the manufacturer's name and place of manufacture, registered number of the factory, and the gross weight, the tare and the net weight of the tobacco in each package. (A) Stamps must be affixed and cancelled in certain definite ways. (0 Should any tobacco or snuff be removed without payment of the tax in whole or part, the Commissioner can make an assessment therefor, which is put into the hands of the collector to collect, and is in addition to the penalties incurred, (j) Tobacco not stamped or unlawfully stamped is forfeited. (A) (a) Eev. Stats. § 3262; 20 Stats. 327; 22 Stats. 401. See first proviso of § 3 of the present Act and its interpretation by the Commissioner, supra. (6) Ibid. (c) Ibid. (d) Ibid, (e) Bev. Stats. § 3357, as amended by § 33, Act of Oct. 1, 189a (/) Ibid. § 3376. (g) Eev. Stats. § 3364, as amended by Act of JIarch 3, 1883. {h) Eev. Stats. § 3362; 20 Stats. 327; 22 Stats. 401. (0 Eev. Stats. §§ 3369, 3370. (.;) Ibid. § 3182. (i-) United States f. 117 Packages of Tobacco, 10 Ben. 343. 28 THE WAR EEVENUE LAW OF 1898. The absence of tlie proper stamp on any package of manu- factured tobacco or snuff shall be notice to all persons that the tax has not been paid thereon, and shall 'h& prima facie evidence of the non-payment thereof. And such tobacco or snuS shall be forfeited to the United States, (a) One is liable for having manufactured tobacco in his possession without being stamped. (6) Congress has power to prescribe the punishment by the penalty and the fine and the imprisonment as a punishment, the whole of which may be imposed, and a delinquent may be proceeded against ' civilly and criminally, (c) A sale completed, or a completed removal of manufactured tobacco, is necessary to the accruing assessment and payment of the tax upon it. (d) The possession of parts of internal revenue stamps which have previously been used upon snuff jars does not constitute an offence within the Rev. Stats. § 3376. (e) A merchant cannot retail leaf tobacco of his own growing by establishing stores at various places to sell this tobacco in connec- tion with other goods, without involving himself in liability as a manufacturer of tobacco. (/) " Sect. 5. Until appropriate stamps are prepared and furnished, tlie stamps heretofore used to denote the payment of the internal-revenue tax on fermented liquors, tobacco, snuff, cigars, and cigarettes may be stamped or imprinted with a suitable device to de- note the new rate of tax, and shall be affixed to all packages containing such articles on which the tax imposed 'by this Act is paid. And any person having possession of unaffixed stamps heretofore issued for the payment of the tax upon fermented liquors, tobacco, (a) Rev. Stats. § 3373. (b) United States v. Keyes, 10 F. R. 876; see Henderson's Tobacco, 11 Wall. 652; Hint. Rev. Rec. 6. (c) In re Leszynsky, 16 Blatch. 9. (d) United States v. A Quantity of Tobacco, 6 Ben. 68. (e) United States t>. Loup, 1 F. R. 695 ; see A Quantity of Tobacco and Cigars, 5 Ben. 407. (/) 40 Int. Rec. Rec. 405. THE WAR EEVEXUE LAW OF 1898. " 29 snufE, cigars, or cigarettes shall present the same to the collector of the district, who shall receive them at the price paid for such stamps by the purchasers and issue in lieu thereof new or imprinted stamps at the rate provided by this Act. " (a) "Adhesive Stamps. — Sect. 6. That on and after the first day of July, eighteen hundred and ninety- eigbt, there shall be le'S'ied, collected, and paid, for and in respect of the several bonds, debentures, or certifi- cates of stock and of indebtedness, and other docu- ments, instruments, matters, and things mentioned and described in Schedule A of this Act, or for or in respect of the vellum, parchment, or paper upon which such instruments, matters, or things, or any of them, shall be written or printed by any person or persons, or party who shall make, sign, or issue the same, or for whose use or benefit the same shall be made, signed, or issued, the several taxes or sums of money set down in figures against the same, respectively or otherwise specified or set forth in the said schedule. ' ' And there shall also be levied, collected, and paid, for and in respect to the medicines, preparations, mat- ters, and things mentioned and described in Schedule B of this Act, manufactured, sold, or removed for sale, the several taxes or sums of money set down in words or figures against the same, respectively, or otherwise specified or set forth in schedule B of this Act." This is derived chiefly from the Act of June 30, 1864, ch. 173, § 151 (13 Stats. 291). "TMiatever upon its face it purports to-be, it is for the purpose of ascertaining the stamp duty. The paper here, as we have said, has the distinctive form cf a draft or check upon an individual. (a) On the payment by stamps between July 20, 1868, and Xot. 23, 1868, see Eev. Stats. § 3379. 30 ' THE WAR REVENUE LAW OF 1898. It falls under that specific description, and is to be taxed according to that description, not varied by proof, and not ranked under any- general terms contained in the statute." (a) Documentary stamps of the denomination of two cents, when spoiled, destroyed, or rendered useless or unfit for the purpose in- tended, or for which the owner may have no use, or which through mistake may have been improperly or unnecessarily used, or when they may have been paid in error, or wrongfully collected, may, when the stamps have been returned to the Commissioner, or a sat- isfactory reason given why they cannot be returned, be allowed for or redeemed, {b) It has just been decided by the Commissioner that, under the present Act, old stamps issued under repealed acts cannot be used in lieu of stamps required by the present law. (c) "Issue." An agent authorized to enter into a contract is em- powered to affix the proper stamps, {d) Instruments executed before the Act went into effect do not re- quire a stamp, (e) " Sect. 7. That if any person or persons shall make, sign, or issue, or cause to be made, signed, or issued, any instrument, document, or paper of any kind or de- scription whatsoever, without the same being duly stamped for denoting the tax hereby imposed thereon, or without having thereupon an adhesive stamp to de- note said tax, such person or persons shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not more than one hundred dollars, at the discretion of the court, and such instrument, document, or paper, as aforesaid, shall not be compe- tent evidence in any court." This section has been chiefly derived from Rev. Stats. § 3422 ; and Acts of June 30, 1864, ch. 173 ; of July 13, 1866, ch. 184; of (a) Mr. Justice Hnnt in United States v. Isham, 17 Wall. 496, 505, 506. {h) Rev. Stats. § 3426, as amended by the Acts of July 12, 1876 (19 Stats. 88), and March 1, 1879, § 17 (20 Stats. 329) ; Eldridge, 432-434. (c) Commissioner's Ruling of July 13, 1898, No. 62. (rf) Cedar Rapids & St. Paul R. R. Co, . Inland Rev. Com'rs, [1898] 1 Q. B. 78. (h) Chicago Ry. T. Elevator Co. v. Inland Rev. Com'rs, 75 L. T. Rep. 157. THE WAR REVENUE LAW OF 1898. 75 granted in New South Wales, and a sole license to use the inven- tion in a specified district of New South Wales, are liable to ad valorem stamp duty as though an actual conveyance on sale under the English Stamp Act of 1891, § 59, subs. 1, such share and license being property, (a) Where there was an agreement under seal for the sale of the good-will of a hotel and licensed victualling business, and for a lease of the hotel, together with the furniture, stock in trade, cash and book debts, the seller to execute a declaration of trust to the leasehold premises in favor of the purchaser, if the landlords refused to consent to an assignment of the lease, this was held not to be an agreement for the sale of an equitable interest in property within the English Stamp Act of 1891, § 69, subs. 1; which pro- vides that any contract or agreement for the sale of any equitable interest in any property, or for the sale of any interest in any property, except lands, shall be charged with the same ad valore7n duty as if it were an actual conveyance on sale of the interest or property agreed to be sold. Such an agreement is liable to duty upon the amount of book debts only. (6) An exchange by a shareholder in one company of his shares for those in another company is not an exchange within the English Stamp Act of 1891, § 73, but is a conveyance on sale within §§ 54, 55, and subject to ad valorem stamp, (c) Eor the purpose of the English Stamp Act of 1891, an instru- ment granting a perpetual annuity has been treated as a conve}-- ance on sale, and not as a security for the payment of any annuity by way of a repayment of a loan, advance, or payment intended to be so repaid. This Act of 1891 provides, in § 54, that a conveyance on sale shall include every instrument wherebj^ any property is transferred to or vested in a purchaser, (d) Debentures undertaking to pay £100 on a day certain, together with a premium of £7, are marketable securities, not transferable bv delivery within Schedule I of the Stamp Act of 1891, and are liable to ad valorem duty upon the amount of the principal and premium, namely, £107. (e) A bond sent over to England from America has been held not to become a valid bond until the authentication in London of the certificate indorsed thereon by the signature of the president of the (a) Australia Smelting Co v. Inland Rev. Com'rs, [1897] 1 Q. B. 175. (6) West London Syndicate v. Inland Rev. Com'rs, [1898] 1 Q. B. 226. (c) Coats V. Inland Rev. Com'rs, [1897] 1 Q. B. 778. (d) Mersey Docks and H. Board v. Inland Rev. Com'rs, [1897] 1 Q. B. 786. (e) Rowell v. Inland Rev. Com'rs, [1897] 2 Q. B. 194. 76 THE WAR REVENUE LAW OF 1898. trust company which was acting as trustee, and was, therefore, held a marketable security issued in the United Kingdom, within the meaning of § 82, subs. 1 (b) (1), of the Stamp Act of 1891, and subject to the tax. (a) In calculating the value of the subject-matter of the contract,^ regard must be had to the consideration or immediate inducement for the undertaking or promise sought to be inferred, and not to the value of the thing concerning which the contract has been made. (&) If no sum whatever is expressed in the order, and the total amount directed to be paid is indefinite, there is nothing to determine the amount of the stamp duty, and the instrument cannot consequently be stamped at all. (c) When an instrument is stamped according to its face value, it is good until it is shown that the state- ment is untrue, (d) If the terms of an instrument are subsequently varied, there must be a new stamp, (e) If immaterial matters are changed, or a mistake is corrected, a new stamp is not necessary. (/) These rules apply to bills and notes as well as to other instruments, (c/) If a bill be either lost or detained by the opposite side, after notice to produce, the presumption of law is that it was duly stamped, unless the contrary be shown, (/j) The reservation of interest on a bill or note does not in any case render a larger stamp necessary; the object of the legislature being to impose a pro rata stamp duty on the sum actually due at the time of taking the security; not upon what might become due in future for the use of the money, although it is reserved from a day prior to the date of the instrument, (i) An instrument that has been paid at maturity by the party primarily liable cannot be reissued, (j) The intent with which a deed is accepted by the grantee, or the (a) Baring v. Inland Rev. Com'rs, [1898] 1 Q. B. 78. (i) Chadwick v. Sills, R. & M. 15; Latham o. Kutley, Id. 13; Baldwin o. Alsager, 13 M. & W. 366 ; Doe c. Wiggins, 4 Q. B. 367 ; Doe v. Amos, 2 M. & R. 180; Ames v. Hill, 2 B. & P. 150; Semple v. Steinau, 8 Exch. 624; Pember- ton V. Vaughn, 10 Q. B. 87 ; Taylor v. Steele, 16 L. J. Ex. 177. (c) Crowfoot «. Gurney, 2 M. & Sc. 473 ; Jones v. Simpson, 3 D. & E. 545. (d) 33 & 34 Vict. ch. 97, § 13. (e) Reed v. Deere, 7 B. & C. 265. (/) Byrom v. Thompson, 11 Ad. & E. 31 ; Farquhar v. Southey, Moo. & M. 14. (.7) See cases just cited. {h) Marine Ins. Co o. Haviside, L. R. 5 H. L. 625. (i) Pruessing v. Ing, 4 B. & Aid. 204 ; Wills v. Noot, 4 Tyrw. 726. (J) Morley v. Culverwell, 7 M. & W. 174; Bartrum v. Caddy, 9 A. & E. 275 THE WAR REVENUE LAW OF 1898. 77 use he puts it to, or makes of it, is immaterial. But whoever accepts a draft or order thereby becomes an active party thereto. To the extent that he makes or emits it, it gives it a new life and circulation, and the intention with which he does so, so far as the stamp duty is concerned, is placed by the Stamp Act in the same category as that of the maker, (a) An order on A by B, which circulated as money, was not, under the former law, required to be stamped as a promissory note or memorandum, but is in form a check; as it is not a check on a bank or banker, it is not subject to stamp duty; even if it were a device to avoid the Revenue Acts, yet being carried out by legal means, it was not subject to censure, (b) It would seem as if the wording of the present law pertaining to checks is broad enough to cover a case like the above. And indeed the Commissioner has just ruled that a person must place a stamp on an order for cash drawn on a merchant by one of his customers, (c) Even if the consent of all parties has been obtained to an altera- tion in a material part, such alteration, nevertheless, avoids the bill under the stamp laws; for it is become a new and different instrument, and therefore requires a new stamp; which stamp can- not then be affixed, {d) Thus where the drawer of a bill payable to his own order sent it to the drawee for acceptance, and as the latter requested that a longer time might be allowed for payment, an alteration to that effect was made with the consent of the drawer, and the bill was afterwards accepted, it was held that, the altera- tion being made before the bill was an available instrument against any party, a new stamp was unnecessary, (e) There are, however, two eases in which an alteration, though in a material part, will not vacate the instrument: first, when such an alteration is made before the bill is issued, or becomes an available instrument; (/) secondly, when the bill is altered to correct a mistake or supply an omission, and in furtherance of the original intention of the parties, (ff) Any alteration in the date, sum, or time of payment, the inser- (n) Dowell V. Applegate, 8 F. E. 698. (b) United States v. Isham, 17 Wall. 496. (c) Supplement to Circular 503 of An!;iist 16, 1898. (d) Wilson V. .Justice, Baj'ley on Bills (6th ed.), 118; Bowman u. Nichol, 5- T. R. 537. (e) Kennerley v. Nash, 1 Stark. 452. (/) Kennerley v. Nash, 1 Stark. 452. (ff) Kershaw v. Cox, 3 Esp. 246 ; Jacobs v. Hart, 2 Stark. 45 ; Byrom v. Thomp- son, 11 Ad. & El. 31. 78 THE WAR REVENUE LAW OF 1898. tion of words rendering negotiable an instrument which before was not so, or altering the words "value received " into an expression of the particular consideration which passed, is a material altera- tion avoiding the bill under the Stamp Acts, (a) But the addition of another name to a joint and several note, on a different part of the face of the note, with the assent of all parties, has been held to operate as an indorsement, (b) If the alteration is merely to correct a mistake, or to make a bill what it was originally intended to be, it will not avoid it under the Stamp Act. (c) When the date is altered, a new bill cannot be drawn without a new stamp, (d) So if a promissory note be signed by A, and subsequently by B as surety for A, while the note is in the hands of the payee, it will be void unless the signature of B is in pursuance of a previous agreement made at the time of making the note, (e) It has been decided recently by the Attorney-General's office that by the terms of this Act carriers must pay the tax on goods con- signed to them for carriage and not the shippers. (/) Express companies have made strenuous efforts to make the shippers pay tlie tax, and threaten to take the matter to the highest courts. They can doubtless raise their rates of carriage to the extent of the tax. When several interests are insured by one contract or policy, the duty must be calculated upon the amount of the several interests ; if it is uncertain at the time the contract is made into what frac- tional parts the whole sum may be divided in proportion to the several interests, a stamp must be imposed large enough to cover all of them. (17) Where there are "open policies" of insura'nce under certain conditions, the required stamps can be affixed to the books of the company on which the amount of premiums under such " open policies " are charged, (h) If a lease under seal also contains a covenant on the part of the lessor to sell the demised premises to the lessee, a deed stamp is (a) Bathe v. Taylor, 15 East, 412; Walton v. Hastings, 4 Camp. 223; Outh- waite V. Luntley, Id. 179 ; Knill v. Willianis, 10 East, 431. (/>) Ex parte Yates, 2 De G. & J. 191. But see Gardner v. Walsh, 5 E. & B. 82. (c) Ex parte Yates, 2 De G. & .1. 191. (d) Outhwaite i'. Lnntley, 4 Camp. 179. (c) Clerk V. Blackstock, Holt N. P. 474. See Ex parte White, 2 Deacon & Chit. 334. (/) A. G. Op. (.July, 1898). (,(/) Rapp V. Allnutt, 15 East, 601. (h) Circular 504, of July 20, 1898. See Appendix. THE WAR EEVENUE LAW OF 1898. 79 not requisite in addition to the lease stamp, as the sale is ancillary to the lease; (a) but if the covenant embraces other and different premises, there must be a deed stamp in addition to the lease stamp, (b) If there is a guaranty as to payment of the rent, this is ancillary to the lease, and one stamp suffices; (c) but if the guaranty is not in a matter ordinarily or necessarily incident to the lease, there must be a deed stamp as well as a lease stamp, (d) If there are several leases to different grantees, (e) or several surrenders, (/) or several releases, (g) on one piece of parchment separate stamps are required; but where there was but one releasee, one was held enough, (/i) A mere acknowledgment of an antece- dent tenancy, or of an existing tenancy, does not require a lease stamp, (i) Where several matters are set forth and authenticated by one written document so connected together as to form one contract and transaction, one stamp is sufficient, (y) Agreements and leases on one sheet of paper must have both a lease and an agreement stamp, unless the agreement is strictly ancillary to the lease, and the two are necessarily connected to- gether and form part of one entire contract, (/c) A compounding with creditors is one transaction, and requires one stamp. (Z) Where several persons have executed a power of attorney, only one stamp is required, (ffi) (a) "Worthington 1). Warrington, 17 L. J. C. P. 117. (b) Price V. Thomas, 2 B. & Ad. 218. (c) Pratt V. Thomas, 4 C. & P. 554. (d) Wharton w. Walton, 7 Q. B. 474. (e) Doe V. Day, 13 East, 241. (/) Reg. V. Everdon, 16 L. J. Q. B. 18. (g) Hex V. Weeks, 2 Ld. Raym. 1445. (A) Perry v. Bouchier, 4 Camp. 80 ; Eushbrook v. Hood, 17 L. J. C. P. 58. (i) Glen V. Dungey, 4 Exch. 61 ; Doe v. Wiggins, 4 Q. B. 375. 0') Doe V. Eereday, 12 Ad. & El. 26, 27 ; Wilson v. Smith, 12 M. & W. 401 ; Annandale v. Pattison, 9 B. & C. 919; Wolseley v. Cox, 2 Q. B. 321 ; Rex v. Louth, 8 B. & C. 247 ; Doe v. Phillips, 11 Ad. & E. 796. (k) Wharton v. Walton, 7 Q. B. 474. (I) Mansfield, Ch. J., in Bowen v. Ashley, 1 B. & P. N. R. 278. (m) Allen v. Morrison, 8 B. & C. 565. As to what instruments are subject to stamp duty and to what amount, see United States v. Learned, 1 Abb. (U. S.) 483; United States v. Baltimore, etc. R. R. Co., 7 Am. L. Reg. n. h. 757 ; Brown v. Tonkin, 1 Cranch C. C. 85 ; 8 Int. Rev. Rec. 148; First Nat. Bank v. Morsell, 1 MacArth. 155 ; Griffith v. Hirsch- field, 1 Mont. Ter. 66; United States v. 133 Casks of Distilled Spirits, 1 Sawyer, 80 THE WAR REVENUE LAW OF 1898. In Circular No. 503 of July 13, 1898, the Commissioner has pub- lished the following rulings: — " 1. Checks drawn bj United States disbursing officers against public funds standing to their official credit in performance of 188; Merchants' Bank v. State Bank, 10 Wall. 604; United States v. Isham, 17 Wall. 496; Hall w. Jordan, 19 Wall. 271. For decisions upon the requirements and administration, in matters of detail, of the provisions of former internal revenue laws requiring stamps upon instru- ments, see Pugh v. McCormick, 14 Wall. 361 ; United States v. Isham, 17 W.ill. 496 ; Hall v. Jordan, 19 Wall. 271 ; United States v. Baltimore, etc. E. R. Co., 7 Am. L. Keg. n. s. 757 ; 8 Int. Rev. Kec. 148 ; United States v. 133 Casks Dis- tilled Spirits, 1 Sawyer, 188; United States i;. Learned, 1 Abb. (U. S.) 483; Piatt, Receiver, v. Broach, 36 How. Pr. 188. For former Acts of Congress requiring stamps to be affixed to certain ■«Titten instruments, see Act of June 30, 1864, § 151 (13 Stat, at L. 291) ; Act of March 3, 1865, § I (Id. 481) ; Act of July 13, 1866 (14 Id. 141) ; Act of June 23, 1874, ch. 462, § 1 (18 Id. 250). See Edwards' Stamp Act. For decisions of Federal courts on the construction and operation of these laws, see James c. Blauvelt, 16 Law Hep. n. s. 485; United States v. Baltimore, etc. R. R. Co., 7 Am. L. Reg. n. a. 757 ; 8 Int. Rev. Rec. 148 ; Campbell v. Wilcox, 10 Wall. 421 ; Pugh v. McCormick, 14 Wall, 361 ; United States i;. Isham, 17 Wall. 496; United States v. Smith, 1 Sawyer, 192 ; United States u. Learned, 1 Abb. ( U. S. ) 483 ; United States v. Brown, Deady, 566 ; Kinney v. Consolidated, etc. Min. Co., 4 Sawyer, 382. For decisions of State courts on the stamp laws of Congress, see 7 U. S. Digest, tit. Internal Revenue, §§22-63; also Davy v. Morgan, 56 Barb. 218; CoppernoU v. Ketcham, Id. 11 1 ; Griffin v. Ranney, 35 Conn. 239 ; Schermerhorn v. Bnrgess, 55 Barb. 423 ; s. c. 38 How. Pr. 123 ; Pacific Bank v. De Ro, 37 Cal. 538 ; Jones V. Jones, 38 Cal. 584 ; DeLorme r. Ferk, 24 Wis. 201 ; Kennedy v. Morri- son, 31 Tex. 207 ; Tucker v. Potter, 35 Coun. 43 ; Jliller c. Larmon, 38 How. Pr. 417 ; Werbiskie v. McManus, 31 Tex. 116 ; Black v. Nettles, 25 Ark. 606 ; Spear V. Alexander, 42 Ala. 572 ; Craig v. Dimock, 47 111. 308 ; Boston .-. Nichols, Id. 353; Cross v. People, Id. 152 ; Whigham r. Pickett, 43 Ala. 140; Vaughan v. O'Brien, 57 Barb. 491; s. c. 39 How. Pr. 515; Sawyer v. Parker, 57 Me. 39; Hanford v. Obrecht, 49 111. 146; Clemens v. Conrad, 19 Mich. 170; Wilson v. McKenna, 52 111. 43 ; People i'. Gates, 43 N. Y. 40 ; Sammons v. Halloway, 21 Mich. 162 ; D'Armond v. Dubose, 22 La. Ann. 131 ; Schnltz v. Herndon, 32 Tex. 390 ; Stolte v. Herndon, Id. 392 ; Fraser r. Robinson, 42 Miss. 121 ; Cook t'. Shearman, 103 Mass. 21 ; Berry v. Boyd, 28 Iowa, 410; Mercer i'. Mercer, 29 Iowa, 557 ; Susong v. Williams, 1 Heisk. 625 ; Angier v. Smalley, 58 Me. 425 ; Van Wickle v. Poydras, 22 La. Ann. 70; Rees v. Jackson, 64 Penn. St, 486; Hoops V. Atkins, 41 Ga. 109 ; Logan v. Dils, 4 W. Va. 397 ; Hetzell v. Gregory, 7 Phila. 148; Green v. Hoi way, 101 Mass. 243; Sporrer v. Eifler, 1 Heisk. 633; Jacobs V. Cunningham, 32 Tex. 774 ; Hale v. Wilkinson, 21 Gratt. 75 ; Jacobs V. Spofford, 34 Tex. 152; Hellman v. Reis, 1 Cin. 30; Atkins k. Plympton, 44 Vt. 21 ; Robinson v. Lair, 31 Iowa, 9 ; Bowker v. Goodwin, 7 Nev. 135 ; Taylor v. Duncan, 33 Tex. 440 ; Frink v. Thompson, 4 Lana. 489 ; Janvrin v. Fogg, 49 THE WAE REVENUE LAW OF 1898. 81 duties required by law do not require a 2-cent internal revenue stamp placed thereon. And all checks drawn by officers of States, counties, and municipalities for the discharge of the obligations of States, counties, and municipalities are exempt under section 17 of the Act. " 2. No stamp is required on ordinary receipts. "3. The exemption from tax on warehouse receipts for agricul- tural products is restricted to receipts for products of this kind, which are deposited by the actual grower thereof in the regular course of trade for sale. This does not exempt warehouse receipts for such products in case the property deposited has already passed from the ownership of the actual grower. N. H. 340 ; Kheinstrom v. Cone, 26 Wis. 163 ; Brown v. Thompson, 59 Me. 372 ; Morris v. McMorris, 44 Miss. 441 ; Moore v. Moore, 47 N. Y. 467 ; Moore u. Quirk, 105 Mass. 49 ; Mogelin v. Westhoff, 33 Tex. 788; Glidden v. Highbee, 31 Iowa, 379 ; Union Agricul., etc. Ass'n v. Neill, Id. 95 ; Waterbury v. McMillan, 46 Miss. 635 ; Duffy v. Hobson, 40 Cal. 240 ; Eumpass v. Taggart, 26 Ark. 398 ; Wallace v. Cravens, 34 Ind. 534 ; Davis u. Eicliardson, 45 Miss. 499 ; Dailey v. Coker, 33 Tex. 815 ; Mobile, etc. R. R. Co. v. Edwards, 46 Ala. 267 ; Corrie v. Billiu, 23 La. Ann. 250; Owsley v. Greenwood, 18 Minn. 429; Prather v. Znlauf, 38 Ind. 155; Cabbott v. Radford, 17 Minn. 320; Browne v. Bennett, 24 La. Ann. 618; DofBn u. Gnyer, 39 Ind. 215; Corry Nat. Bank l: Rouse, 3 Pittsb. 18; Baker v. Baker, 6 Lans. 509 ; Timp u. Dockham, 29 Wis. 440 ; State v. Hill, 30 Wis. 416 ; Eicord v. 'Jones, 33 Iowa, 26; Bernard's Succession, 24 La. Ann. 402; Patterson v. Gile, 1 Col. T. 200 ; Grand v. Cox, 24 La. Ann. 462 ; Turner v. State, 48 Ala. 549 ; Forcheimer v. Holly, 14 Fla. 239 ; Works v. Hershey, 35 Iowa, 340 ; Morgan v. Graham, Id. 213; Black v. Woodrow, 39 Md. 194; Chartiers, etc. Turnp. Co. v. McNamara, 72 Penn. St. 278 ; Myers v. McGraw, 5 W. Va. 30 ; Kile V. Johnson, 48 Ga. 189 ; Foster v. Holley, 49 Ala. 593 ; Alter v. McDougal, 26 La. Ann. 245 ; Pargoud v. Richardson, Id. 672 ; s. i;. 30 La. Ann. Part II. 1286 ; Emery v. Hobson, 63 Me. 33 ; Rowland v. Plummer, 50 Ala. 182 ; Reis v. Hellman, 25 Ohio St. 180 ; Ferryman v. Greenville, 51 Ala. 507 ; Oxford Iron Co. V. Spradley, Id. 171 ; Chaffe v. Ludeling, 27 La. Ann. 607 ; Miller v. Weutworth, 82 Penn. St. 280 ; Stewart v. Hopkins, 30 Ohio St. 502 ; Garish v. Hyman, 29 La. Ann. 28; Bibb v. Bonds, 57 Ala. .509. On stamp laws and decisions thereunder see Bump, Internal Revenue Laws ; Bump, United States Stamp Laws ; Boutwell, Manual of the United States Tax System; Davidge and Kimball, Internal Revenue Laws; Dresser, Internal Rev- enue Laws; Edwards, Stamp Act ; Byles on Bills, sections on stamps ; Addison on Contracts, sections on stamps; and the following articles: Municipal Cor- porations and the Revenue Tax, 7 Alb. L. J. 257 ; Unstamped Instruments as Evidence, Ibid. 49 ; The Internal Rev. System, 2 Am. L. Rev. 240 ; Violations of the Int. Rev. Law, United States v. McKee, 4 Dillon, 128, 12 Cent. L. J. 159 ; Unstamped Instruments, 10 Am. L. Reg. n. s. 481 ; Stamps, 11 Ibid. 137. On the Admissibility in Evidence of Instruments not duly stamped, as required by Law, see 6 West. Jur. 17. 6 82 THE WAR REVENUE LAW OF 1898. "4. An inland bill of exchange, within the meaning of this Act, is a bill of exchange drawn and made payable anywhere in the United States. " 5. Any order for payment of money drawn iu, but payable out of the United States, if drawn singly, is subject to tax of 4 cents for $100 or less, and for each additional hundred dollars or fraction, 4 cents. " 6. Where certificates of shares were sold and delivered before July 1, 1898, entry of transfer on corporate books after June 30 does not require stamp. " 7. New certificates of stock issued to holder in lieu of origi- nal certificate, and remaining in his ownership, do not require stamps. " 8. When certificate of stock is sold and stamp tax is paid on memorandum thereof, upon transfer of this certificate to purchaser's name, no additional tax for such transfer is required. Where one certificate represents several shares of stock (however large the number of shares), on transfer of this certificate the stamp tax is to be reckoned on its face value, and not on the face value of each separate share of stock which it represents. "9.- A 2-cent stamp is required on an order for cash drawn on a merchant by one of his customers. " 10. Certificates of deposit drawing interest, if left a certain time, are taxable the same as promissory notes. •' 11. The withdrawal of funds by a depositor on the presenta- tion of his bank book to the savings bank, does not require a stamp, if there is nothing accompanying it in the form of an order for the payment of money. "12. If papers in the nature of receipts are given in lieu of checks, and are used as commercial negotiable instruments, they are checks and not receipts, and are subject to tax. "1.3. Where certificates of stock are delivered as collateral, the stock to be forfeited only upon condition of failure to paj' the debt for which it is pledged, a stamp is required as a pledge and not as a sale. ' ' 14. Real-estate mortgage notes require to be stamped in addi- tion to the stamps placed on the mortgage. "15. Where there is a pledge of property accompanying any promissory note, which pledge is subject to stamp tax under Schedule A, this stamp tax must be paid, notwithstanding the fact that a stamp is also required on the note connected with it. "16. Only purely co-operative or mutual fire insurance com- panies carried on by the members thereof solely for the protec- THE WAR REVENUE LAW OF 1898. 83 tion of their own property, and not for profit, are exempted from taxation. "17. Assessment beneficiary life insurance associations insur- ing their own members, and not for profit, come within the ex- empting provision. " 18. The exemption given to fraternal beneficiary life insurance associations applies also to fraternal beneficiary accident insurance associations. "19. In cases of loans on real estate, where promissory notes are given, which are not paid at maturitj', but on which an exten- sion of time of payment is granted, without the taking of a new note, it is held that every such extension is a renewal of the note within the meaning of the statute, and that the requisite stamp must be afiixed for every such renewal or extension. This also applies to notes discounted before July 1, falling due on or after that date. "20. The person who signs and issues a banlc check, without affixing the proper stamp, becomes involved in liability to penalties under section 10 of the Act, unless it is shown that he had no de- sign to evade the payment of the stamp tax, and that the requisite stamp was afiixed and cancelled by the bank or person upon whom it was drawn before payment. "21. Where a check is presented at a bank, without having the requisite stamp affixed, the bank, if it pays such unstamped check, becomes liable to the penalty provided by section 10 of the Act. Bank may cure defect by affixing proper stamp. "22. Bucket-shop proprietors giving memorandum of transac- tions are required to pay special tax as brokers. "23. Where a tax of 10 cents is paid on the bill of lading for goods exported, it is held that no stamp tax is required to be paid on copies of such bills of lading. " 24. On inland bills of lading, ' each duplicate ' requires ' a stamp of the value of one cent.' "25. Bills of lading for exportations by railroad to British North America require a 10-cent stamp. " 26. A wharf receipt given to a shipper, in exchange for which a bill of lading is issued, does not require a stamp. "27. Baggage forwarded by railroad company or express, subject to extra charges, comes within the law requiring stamp on bill of lading, or other evidence of receipt and forwarding. "28. It is the duty of carriers to issue a bill of lading or receipt for goods accepted by them for shipment, and to affix the stamp, and a penalty is prescribed for failure to do so. 84 THE WAR REVENUE LAW OF 1898. ' ' 29. Mere local operators for the delivery of packages, baggage, and such like, within the limits of the same town or city, are not required to give bills of lading. Although such operators may give a receipt for articles to be delivered, such receipt is not re- quired to be stamped. A mere carrier, as, for instance, a person with a horse and wagon, who does a local delivery business in a city or town, is not included within the above requirement. The carriers which were intended to be included within the terms of Schedule A, under the head of 'Express and Freight,' are such as are engaged in the transportation of express matter and freight from one place to another in the ordinary course of commerce and trade. " 30. Tickets issued in the United States for passage on a vessel not sailing from any port of the United States, but from a Cana- dian port (or other foreign port), are not subject to stamp tax. "Tickets issued in Canada for passage on a vessel sailing from a United States port are not subject to stamp tax. "The only passage ticket for which stamp tax is required to be paid by this statute is a ticket issued for transportation of the passenger 'by any vessel from a port in the United States to a foreign port.' When, therefore, to such passenger ticket there is attached another ticket entitling the passenger, after his arrival at the foreign port, to transportation to various points in Europe, or elsewhere, such additional ticket is not subject to stamp tax. "The stamp tax for a passenger ticket may be affixed thereto and cancelled at the time and place where it is issued, or it may be affixed and cancelled at the pier before the passenger boards the vessel. "Where one passenger ticket is issued, even though it contains several names, but one stamp tax is required to be paid thereon. " 31. There is no exemption from the stamp tax on charity tickets issued at low rates. ' ' 32. Barges are not included in the term ' vessel ' in the para- graph relating to charter party. "33. The manifest for custom-house entry or clearance of the cargo of any ship, or vessel, or steamer for a foreign port does not include ship's supplies for its voyage. It only includes those things which the ship has taken aboard for transportation. "34. Stamp duties imposed on manifests, bills of lading, and passage tickets do not apply to steamboats or other vessels plying between the ports of the United States and ports in British North America. "35. A telegraphic despatch or message is required to be stamped by the person who makes, signs, or issues it. THE WAR EEVENUE LAW OF 1898. 85 " 36. There is no tax upon the bill of sale of a vessel. A mort- gage of a vessel requires a stamp as a mortgage of personal property. "37. Dray receipt given at export steamer's wharf does not require a stamp in addition to bills of lading which are stamped. Shipping receipts given by common carriers of freight for goods to be transported to port of export require stamp. "38. Where a bond is given with a guaranty company as surety, the bond should have, in addition to a 50-cent stamp, as required under the head of 'Bond,' in Schedule A, a stamp denoting one- half of 1 cent on each dollar or fractional part thereof paid by the principal obligor on the bond as a premium, under that paragraph of Schedule A relating to guaranty companies. (United States oiBcers required to give bond will take notice.) "39. Bonds 'required in legal proceedings' are exempt from stamp tax. They are such as are required in litigation in either civil or criminal cases, such as prosecution bonds, injunction bonds, bonds to stay proceedings, bonds upon appeal, writs of error, bonds for costs, and the like ; and in criminal cases, recognizances, bonds for appearance, bail bonds, and also bonds in criminal cases upon appeal and writs of error, supersedeas bonds, etc. Bonds given by persons appointed by the court, conditioned for the faithful per- formance of the duties of their office or position, such as receivers, assignees, executors, administrators, and guardians, are not exempt, and the stamp tax must be paid thereon. "40. Tickets, which are on the face merely memoranda of money due (e, g., John Doe, June 25, 1898, $15.00), and do not con- tain any language making them checks or orders for the payment of money or promissory notes, are not subject to tax, unless re- ceived and paid at bank the same as checks. "41. The exemption granted to co-operative building and loan associations, etc., is confined to the stock and bonds issued by the associations therein mentioned, and therefore does not relieve them from other stamp taxes. "42. ' Certificates of any description required by law not other- wise specified in this Act, ten cents.' The first requirement neces- sary to subject any given certificate thus generally described to tax is that it shall be one which is required to be given by law, national. State, or municipal. All such are taxable, except those coming within the exemption of section 17, that is to say, those which are given strictly in the exercise of the functions — govern- mental, taxing, or municipal — of the State or corporation. "Certificates given by an officer, not for a public or govern- 86 THE WAR REVENUE LAW OF 1898. mental purpose, but for private interests and use, are liable to the tax if they are given in obedience to any law which requires them to be given when called for, " A certiiicate of search showing that the dockets or records of a court have been searched, and show either that liens exist or do not exist as to property, or that judgments are rtcurded or are not recorded, and also certificates of search to ascertain whether or not titles are good, whether taxes have been paid, and other certifi- cates of this character, are not such as are required in the general discharge of governmental functions on the part of the officers giving them, but are such as are needed for private use and private interests, and are, therefore, subject to the tax, as being required by law to be given when called for. " If the act performed, or the certificate issued by the officer, is in the discharge of an official function necessary in operating the general machinery of the Government, it is exempt. "43. Certificates of acknowledgment of deeds and mortgages are not required to be stamped. The memorandum on the back of a deed or mortgage, made by the register or recorder, that the instrument has been placed upon record, is not a subject of taxa- tion. It is not a certificate such as is contemplated by the law. It is a brief note on the back of the deed or mortgage citing date of filing and date and place of record. "44. Certificates of birth, marriage, and death, given in pursu- ance of the laws of the State requiring the collection and registra- tion of vital statistics as a basis for the administration of public health laws, come within the exemption of section 17. Such certificates, however, when issued to private persons for private use, are subject to the 10-cent stamp tax. "45. The ordinary nota.iy's jurat is not required to be stamped. "46. A policy does not require a stamp until it is issued, or is offered as an insurance policy, and an insurance company can stamp a policj^ through its local agents as well as through its general agent. " Any agent of the company who is charged with the duty of delivering the policy to the policy holder and receiving the pre- mium, would be authorized to affix and cancel the stamp in behalf of the company. "47. A stamp must be attached to premium notes as well as to policies. "48. Deeds signed, acknowledged, and fully executed in June do not require stamps, though delivered in July, unless, by State law, registration is necessary to pass title. THE WAE REVENUE LAW OF 1898. 87 "49. A mortgage, no matter what the date, should not be admitted to registration when presented on or after July 1, 1898, unless there is attached and cancelled the proper revenue stamp. " 50. In cases where the consideration in a deed is nominal, the actual value of the property conveyed should govern the amount of the stamp required. "61. Original lease requires a stamp. No stamp is required on copy executed by the parties at the time of the original lease. " 52. If live stock is sold at an exchange or board of trade, or other similar place, either for present or future delivery, the sale, agreement of sale, or agreement to sell must be evidenced by a bill, memorandum, or agreement to be delivered by the seller to the buyer, and this evidence should have the stamp affixed as required in the Act, viz. : One cent on a $100, and on each $100 or fraction thereof, additional, 1 cent. "53. Where telephone companies have lines extending into more than one collection district, the return may be made to the collector of that district in which the principal business office of the company is located. "54. Contracts and agreements between subscribers and tele- phone companies for the placing of a telephone, and paj'ment therefor, are not subject to stamp tax. "55. Powers of attorney executed on the back of stock certifi- cates used in connection with transfer of shares require to be stamped in addition to the tax on transfer of stock. " 56. Powers of attorney to sell or transfer Government bonds are taxable. "57. A 10-cent stamp is sufficient upon a proxy for use in voting at an election of officers of an incorporated company, with- out regard to the number of signatures. "58. Revenue stamps are not required on the reports of earnings and dividends, and reports of condition made to the Comptroller of the Currency by national banks. "59. The list of shareholders required by section 5210, Re- vised Statutes, to be forwarded to the Comptroller of the Currency requires no stamp tax. The paper is not a certificate but a list. "60. A stamp is not required on returns of national banks of notes in circulation made semiannually to the United States Treasurer. "61. In regard to the cancellation of internal revenue adhesive stamps, which the law requires to be by writing or stamping the initials of the persons using the same, and the date upon which the stamp shall be attached or used, it is held that the initials and 88 THE WAR REVENUE LAW OF 1898. the year alone will be sufficient. This cancellation may be by writing or imprinting with a hand stamp. " 62. Old stamps issued under repealed Acts cannot be used in lieu of stamps required by the present law." In a supplement to Circular No. 503, on August 16, 1898, the Commissioner issued the following additional rulings under Sched- ule A : — "63. Administration, Letters of. — Letters testamentary or of guardianship do not require stamps. Petitions for appointment of administrators, executors, or guardians require no stamp. "64. No stamp is required on affidavits. "65. Bonds. — Bonds of brewers, manufacturers of oleomar- garine, manufacturers of tobacco, manufacturers of cigars, distil- ler's annual, distiller's warehousing, transportation and export bonds are required to be stamped. Where these bonds are required by law or regulation to be made in duplicate or triplicate, each must be stamped. Copies of distiller's bonds forwarded to this office for office use need not be stamped. "66. Where a surety company is surety on these bonds, the tax is one-half of 1 cent on each dollar of premium in addition to the 50-cent tax on the bond. The stamp representing this amount should be placed on the original bond, and on the duplicates and triplicates a memorandum can be made stating that this tax has been paid by stamp attached to the original bond. "67. A bond filed by order of court to obtain a decree or order for the sale of real estate is a bond given in a legal proceeding, and is exempt from tax. "68. Bonds given by public officers, such as sheriffs, clerks, registers or recorders of deeds, treasurers of counties, cities, or towns, or other public officers of like character, are required to be stamped. "69. A bond, which is nothing more or less than a promise to pay so much money, should be treated as a promissory note. This applies to a bond accompanying a mortgage. "70. Mere agreements to build liouses are not taxable, but if bonds are included for the faithful performance of work or con- tracts, they are held to be subject to tax as bonds. " 71. Bonds issued by guaranty companies in Canada, guaranty- ing the fidelity of employees, of individuals, or corporations in the United States, executed and delivered in Canada, are not taxable, but if they are not valid until countersigned or delivered by the agent in the United States, they should be stamped. ' ' 72. Marriage bond requires a stamp of 50 cents. THE WAR REVENUE LAW OF 1898. 89 "73. Bills of lading for the export of goods, if made out in sets of two, each having equal value, and each being considered an original bill, both should be stamped. "74. Broker's Note. — 'Broker's note, or memorandum of sale of any goods or merchandise, stocks, bonds, exchange, notes of hand, real estate, or property of any kind or description issued by brokers or persons acting as such, for each note or memorandum of sale, not otherwise provided for in this Act, ten cents.' " 75. The original note or memorandum of sale is alone subject to the tax of 10 cents when made by a broker or one acting as such, and the tax is payable by said broker or one acting as such; the dupli- cate or the copy of the original memorandum of sale is not taxed. "76. A mere memorandum, accompanying an offer to purchase, is subject to the tax only provided the offer is accepted, and should be stamped by the broker on the acceptance of the offer. "77. A statement of account showing the receipts and disburse- ments in connection with a sale, and not being the contract of sale, does not require a stamp. "78. A broker's memorandum of sale of promissory notes ('notes of hand ') requires the 10-cent stamp. "79. Certificates. — Certificates required by law issued by any Department or officer of the Government at the request of private persons, solely for private use, should be stamped. The stamp should be furnished by the person applying for the instrument and for whose use and benefit the same is issued, and should be affixed before the document is delivered. "80. Certificates of officers of the United States, given in the discharge of official functions necessary in carrying on the machin- ery of the Government, are exempt. " 81. Certificates issued by an officer of the State, in the interest of the State, are not liable to tax. "82. Any documents, the stamping of which would make it necessary that the State should furnish and affix the stamp, are held to be exempt from the stamp tax. "83. Return of birth, certificate of death, and certificates of the registrar as to the facts declared concerning birth, marriage, and death are none of them held to be subject to the stamp tax imposed upon certificates, in view of the fact that these certificates are given in pursuance of State laws for public purposes. "84. Certificates issued by the health officer of New York, under State statute, relative to the employment of children, are exempt, being issued in the discharge of a duty connected with the opera- tions of the Government. 90 THE WAR REVENUE LAW OF 1898. " 85. A marriage certificate, to be returned to any officer of a State, county, city, or town, to constitute part of a public record, requires no stamp. A marriage certificate issued by tlie officiating clergyman or magistrate and given to the parties, if required by law, must be stamped at the rate of 10 cents. "86. A teacher's certificate issued by a county superintendent of public instruction or other officer of State, county, or municipal- ity comes within the exemption provided by section 17 of the Act, and does not require a stamp. These certificates, given under reg- ulations adopted in connection with public schools, are held to be for governmental purposes rather than for private use. "87. A mercantile license or liquor dealer's license, being a certificate required by the laws of a State or ordinance of a city in the exercise of the functions governmental, taxing, or municipal of the State or corporations, comes within the exemption. "88. Inspectors and weighers of grain, who give certificates under State laws, are not required to stamp such certificates. They are exempt under section 17. ' ' 89. No stamp is required upon certificates of the sufficiency of sureties upon bonds. " 90. A stamp is required on a certificate of incorporation. "91. The certificate of a clerk of court to the qualifications of a notary public, or justice of the peace, is held to be a certificate requiring a stamp. "92. An architect's certificate requires no stamp, unless, by an indorsement, it becomes an order for the payment of money. "93. Charter Party. — The tax under this head is imposed only upon vessels employed in foreign trade or the whale fisheries, and does not apply to vessels employed in domestic trade and trade on the Great Lakes with Canada. "94. A certificate of acknowledgment to a deed where the con- sideration of the deed is $100 or less, or to a mortgage where the consideration is $1,000 or less, does not require a stamp. "95. Certificates issued at tax sale or certificates of redemption from tax sale do not require stamps. "96. Certificate of 'Proof of loss ' for use of an insurance com- pany, being a statement made as to the facts and circumstances attending a fire, is not a certificate requiring a stamp. "97. Certificates required by law, which are made by court officers under the direction and authority of the court, and which are necessary to give proper effect to the court proceedings, are exempt. "98. Court processes, such as summonses, writs of attachment, THE WAR REVENUE LAW OF 1898. 91 subpoenas, warrants, orders of court, etc., are not required to be stamped. " 99. Certificates of protest of every note, bill of exchange, etc., whether protested by a notary public or by any other officer duly authorized by law, must be stamped. "100. Checks, Drafts, Orders for the Payment of Money, etc. — Sight drafts drawn upon or issued by any bank, trust company, or any person or persons, companies or corporations, require a stamp, and, if the acceptance of the draft is accompanied by an order to the bank to pay the same and charge to the account of the drawee, this accompanying order requires, in addition, a 2-cent stamp as 'an order for the payment of money.' "101. Where a draft dulj-- stamped is drawn by one bank on another bank, the bank receiving and paying it is not required to affix any stamp thereto. "102. When a bank charges a customer's account with the amount of a note, at its maturity, which he has given and which is made payable at that bank, no liability to stamp occurs thereby, unless some written direction is given by the maker of the note to the bank which is, in effect, an order to the bank to pay the amount of the note to the holder out of the funds of the maker of the note. Such an order would require a 2-cent stamp. "103. Checks drawn by the manager of the clearinghouse, to settle balances between banks, are subject to stamp as checks. "104. Orders for the payment of money on sight or on demand are subject to the stamp tax imposed on checks by the third para- graph of Schedule A; but, on orders for the payment of money ' otherwise than at sight or on demand,' the stamp tax must be paid as on promissory notes. "105. An order payable or redeemable in merchandise only (and not in money) does not require the 2-cent stamp. "106. Rebate checks issued by conductors of the value of 10 cents, being the excess on fare collected on trains, which are redeemable by the company's agent on presentation, are subject to tax. "107. Tickets received at a bank and paid the same as checks are regarded as in effect orders for the payment of money. ' ' 108. Orders for the payment of money, drawn by the secretary of an order or beneficiary society on its treasurer, in favor of a third party, require a 2-cent stamp. "109. The second proviso in the paragraph relating to life in- surance in Schedule A, ' that the provisions of this section shall not apply to any fraternal, beneficiary society, or order,' relates only to policies of insurance referred to in that paragraph. 92 THE WAR REVENUE LAW OF 1898. " 110. A check drawn by the cashier, or some other officer of a bank, upon the bank of which he is such officer, made payable to some person not connected with the bank, requires a stamp. " 111. If a check used is simply in the nature of a memorandum, and not an order for the payment of monej', but used within the bank exclusively, as a method of keeping the accounts, it is not necessary to stamp the same as a check. "112. A check drawn in this country upon a bank is subject to the same tax, wh(4her the bank upon which it is drawn is a domt's- tic bank or a bank located in a f(n-eign country. The distinction between a check and a bill of exchange, either inland or foreign, is well defined. "113. The conveyance by express companies or other common carriers of bank bills, coin, currency, or money of any kind, im- poses an obligation on such common carriers to issue and stamp a bill of lading or receipt for the same, it being held that such property is included within the terms ' any goods accepted for transportation.' "114. Money orders issued by express companies must be stamped at the rate of 2 cents for each order. "115. Orders by telegraph or otherwise for the payment or transfer of money abroad issued by express or other companies, or any person or persons, require a stamp at the rate of 4 cents for each $100. Orders for the same purpose within the United States require a stamp of 2 cents on each order, irrespective of tlie amount. " 116. Deeds and Mortgages. — Deeds and mortgages executed by a sheriff, in compliance with an order of the court, are subject to tax. " 117. If a deed does not grant, assign, transfer, or convey to the purchaser any lands, tenements, or other realty, but only the right to burial, to erect monuments, etc., it does not require a stamp. "118. A tax is not imposed upon an instrument whereby the title to personal proiierty is convoyed, but a mortgage or pledge of personal property is taxed under Si'liedule A of the Act. " 119. There is no difference in the rate of taxation between that on a chattel mortgage and on a mortgage of realty. " 120. Wliere a railroad mortgage is issued for the purpose of securing bonds, wliich are reserved to be issued only on a mileage ba.sis of road afterwards constructed, whenever the mortgage goes into operation, it should have the stamp affixed. The mortgage cannot go to registration without such stamp, and no recorder or register should receive it for registration without the stamp. "121. The stamp tax is required to be paid on the assignment THE WAR REVENUE LAW OF 1898. 93 of a mortgage at the same rate as on the original instrnment. AVhero au assignment is made of a mortgage by a separate written instrument, and the mortgage and instrument are deposited with a trustee as security for obligations, the stamp tax must be paid on the memorandum of the pledge of these instruments at the rate fixed by tlie paragraph relating to mortgage or pledcje. " V2-2. A\'here a mortgage is deposited with a trustee as security for obligations without any assignment, but accompanied by a power of attorney, authorizing an assignment in the e^•ent of a de- fault upon the obligations, the stamp tax is required to be paid on the pledge of the mortgage and also on the power of attorney, but not on the transfer authorized until this transfer is completed. "123. JNIortgages received by a State from persons to whom State lands may be sold are subject to the stamp tax. ''124. Abstracts of title do not require to be stamped. '• 125. Deeds of release of mortgages and trust-deeds require to be stamped. If the releases are simply certilicates that a lien has been removed from the property, only a 10-cent stamp is necessary; but if they are instruments which reconvey the title to the mort- gagor, they must be stamped like other deeds, the consideration being the amount released. "12L>. '\Miere local laws authorize entry of satisfaction upon the record, and the mortgage is thus cancelled, such entry does not require a stamp. If the mortgagee, as he has a right to do in some States, makes a power of attorney to the register, or recorder, or other person, for the entry of satisfaction of the mortgage, stamp tax must be paid on this power of attorney. '' 127. £.rpress Itcceipts. — The shipment of bundles or packages of newspapers inclosed in one general bundle under a single bill nf lading is permitted, and tliere will be no objection to the distribu- tion of the contents of such a general bundle at the different stations along the line of the railroad. '■'128. A shipment bears but one tax, although in completing it transit by rail, boat, or other method of conveyance is required. " 129. The stamp should be aflSxed to the evidence of receipt and forwarding for each shipment, whether the evidence is in the form of a bill of lading, manifest, receipt, or book, and the common carrier is compelled by law to issue this evidence of receipt and forwarding. "130. Insiirnnce Policies. — A policy of insurance is not valid unless it bears the proper cancelled revenue stamp. "131. A stamp is required upon every assignment of a policy of insurance at the same rate as that on the original instrument. 94 THE WAR EEVENUE LAW OF 1898. "132. Neither the so-called mortgage clause attached to a policy nor its cancellation or release requires additional stamp. "133. Where a policy of life insurance is assigned as collateral security for a loa;n, it should be stamped as a pledge according to the amount of debt secured, and not according to face of policy. "134. Concerning the payment of internal revenue tax on pre- miums charged on marine, inland, or fire insurance under open policies, see Internal Revenue Circular No. 504. "135. Reinsurance of insurance policy in other companies is not taxable if original policy is properly stamped, and the reinsurer receives only the proportionate premium on its proportionate liabil- ity. If, however, the risk becomes extra hazardous, and there is reinsurance effected, the extra premium paid is taxable. " 136. Leases. — Where leases are executed in duplicate, so that both are originals, both are required to be stamped ; but if there be but one original, copies thereof are not required to be stamped. "137. This oifice holds that where a receipt is given for money received as rent for certain premises and for a certain term, and there are no other recitals in the receipt, it does not require a stamp. If the receipt contains any phrase or clause that can be construed as a contract for the hire, use, or rent as aforesaid, in such cases the receipt becomes something more than a bare receipt, and should be stamped according to its tenor and effect. A mere reference in a rent receipt to an existing lease, duly executed, will not be construed as a new lease. "138. Notes. — Where a note or notes with detached interest- coupon notes are given, each coupon note requires a stamp in addi- tion to the stamp placed on the principal note. "139. Interest coupons attached to bonds and surrendered as receipts for interest paid do not require a stamp. " 140. No stamp is required upon the transfer by indorsement of promissory notes. " 141. Where notes secured by a deed of trust are used as collat- eral, the deed of trust and the notes are required to be stamped, not on the basis of their face value, but on the amount for which they are pledged (that is to say, the memorandum of their pledt^e must be so stamped). This pledge of notes and deed of trust does not require to be stamped again because of renewals of the notes held as collateral if the pledge itself is not renewed. "142. Promissory notes which have matured and have been allowed to run without suit, are held not to be renewed by the pay- ment of interest. This is looked upon as a 'forbearance' and not a renewal, the holder not relinquishing his right of action for any stated period. THE WAR REVENUE LAW OF 1898. 95 "143. Where judgment notes, so called, contain a clause au- thorizing any attorney-at-law to confess judgment in favor of the holder of the note, such authorization is held to be a power of attorney, and taxable as such in addition to the tax required on the judgment note as a promissory note. "144. Powers of attorney executed abroad and used in this country require a stamp. "146. Powers of attorney and proxies for the purpose of voting the stock of building and loan associations, which make loans only to their shareholders, are required to be stamped. Where, upon one power of attorney or proxy, a number of shareholders join in appointing a certain person to vote their stock, one stamp is sufficient. "146. Receipts. — Receipts given by a safe deposit company, in renting boxes in the company's vault, are not subject to tax, nor are receipts given by such companies merely for the safe-keeping of money and valuables. "147. Receipts given by the patrons of post-office for box rent are not taxable. " 148. Sales or Transfers of Stock. — In reckoning the stamp tax on transfer of certificates of stock, the tax is reckoned on the face value. In reckoning this tax, the fact that only part of the face value of shares subscribed for and issued has been paid by the share- holders is not to be taken into consideration. "149. Where stock is sold at the par value of $100, and upon which it appears that only $26 have been paid, the tax is to be reckoned upon the face value of $100, and not upon the $25. "150. Where one certificate represents several shares, the tax of 2 cents on each $100 or fraction thereof is to be reckoned on the face value of the certificate, and not on the face value of each separate share. "151. On transfer of one certificate representing 500 shares, $6 par value, the stamp tax required is 60 cents. "162. When certificates of stock or other securities are pledged for a loan, the stamp tax is to be reckoned not on the face value of the certificates or securities, but on the amount of money loaned above $100. "153. When stock is transferred, for which no certificate has been issued, and the evidence of transfer is shown only by books of the company, the stamps should be placed upon such books. Where the change of ownership is by the transfer of a certificate, and the certificate contains a blank form of assignment on the back which is filled in by the insertion of the name of the person to whom 96 THE "WAR REVENUE LAW OF 1898. the stock is transferred, the stamp should be placed upon the certiflcate. "154. In case of an agreement to sell, or where the transfer is by the delivery of the certificate, signed in blank, the name of the transferee or vendee to be filled in afterwards, there should be made and delivered by the seller to the buyer a bill or memorandum of sale, to which the stamp should be affixed. " 155. Sales of Live Stock. — When a sale is made of live stock at a live-stock exchange or any similar place, or an agreement of sale, or an agreement to sell entered into, the seller must give to the buyer a bill, or memorandum, or other evidence of such sale, agreement of sale, or agreement to sell, to which must be affixed the stamp required, viz., 1 cent for each $100 in value of such sale, agreement of sale or agreement to sell, and 1 cent for each additional $100 or fractional part thereof. "156. Teleffrajjhic messatjes sent by the Associated Press over their own private lines to different newspapers are not required to be stamped. "When one uses a leased Western Union telegraph wire, for which he pays a stipulated annual rental, and has the exclusive use, and for which he employs his own ojierator, stamp tax is not re- quired to be paid by him on messages sent by him over this wire relating to his own private business. " 157. If the sender of a dispatch is a Government or State officer in the discharge of a duty in carrying out governmental functions required by law in operating the machinery of the Gov- ernment, the dispatch is exempt; but if the act is simply that which the officer does individually in the interest of a private person or outside party to serve such pri\-ate person or outside party individ- ually, then the dispatch must be stamped. "158. The payment of tax on messages transmitted by a tele- graph company, and subsequently received and transmitted by a telephone company, does not exempt the last-named company from the payment of tax on the message so transmitted. "159. Warehouse Receipts. — Stamps should be affixed to ware- house receipts for goods, merchandise, or property held on storage in public or private warehouses, by the warehouseman. "ICO. If the actual grower of tobacco, which is an agricultural product, deposits the same in a warehouse in the regular course of trade for sale and takes a warehouse receipt, this receipt is exempt from the stamp tax when it is issued, and it is not required to be stamped at any time after its issuance (if the tobacco which it rep- resents remains in warehouse as it was originally deposited by the THE WAR REVENUE LAW OF 1898. 97 grower), although the same may he transferred as a negotiable in- strument and presented to the warehouseman by other than the original holder. " 161. Where tobacco, or the warehouse receipt therefor, is sold 'at any exchange or board of trade, or other similar place,' a memorandum of such sale must be made by the seller, and the stamp affixed thereto and cancelled. "162. Where a warehouse receipt is sold by a broker at his own office or elsewhere than at a place of exchange, or other place of public sale, the 10-cent stamp must be affixed to the memorandum of this transaction under the paragraph relating to broker's contract. " 163. Any receipt or memorandum given by a warehouseman or any signing by a warehouseman of any express company's book or other receipt evidencing the fact that goods have been placed on storage is such a receipt requiring a stamp tax of 26 cents, whether the same is negotiable or non-negotiable. "164. A warehouse receipt which includes also an insurance against fire should be stamped also as an insurance policy accord- ing to the premium charged. ' ' 165. Compress receipts for cotton are not taxable .as warehouse receipts if they do not embrace any contract, express or implied, for storage, and if the cotton is shipped away as soon as the com- press is made. "166. In regard to who shall pay for stamps required on docu- ments, this office cannot dictate. It is the duty of the person, firm, or corporation issuing the instrument to see that it is duly stamped, and a penalty is provided for neglect in so doing, and the inference is drawn that the person, firm, or corporation issuing the instru- ment shall pay for the stamp required. "167. Proprietary stamps cannot be used on documents." To the Attorney-General of Massachusetts has recently been sub- mitted, by one of the State officials, the question whether certifi- cates or instruments issued officially must be stamped, and by whom. He has ruled that certificates issued by clerks of courts should be stamped under the Act of 1898, and that the stamps may be affixed either by the party who issues the instrument, or by him for whose benefit it is issued. The stamps are to be paid for by the person for whose use the paper is issued, and as it is the duty of the officer issuing to see that the document is duly stamped, he may lawfully require the person for whose benefit it is issued to pay for the necessary stamps. As a matter of convenience such officers should have on hand a supply of stamps, which, of course, in each case must be paid for by the person for whose benefit the paper is 7 98 THE WAR REVENUE LAW OF 1898. issued. "It is obvious that with certain exceptions, not now neces- sary to consider, Congress is indifferent as to who shall pay the tax. It is not a tax upon any class of individuals, but upon transactions. It is well settled, however, that in the case of certificates issued by any officer of the State, for the benefit or use of any person or cor- poration excepting the State, only the person or corporation for whose use or benefit the certificate is issued, can be compelled to pay the tax chargeable by law. Congress has no power to impose a tax in any form upon the States as sovereign bodies. The same is true as to municipal corporations." (a) In another opinion recently given to the Secretary of the Commonwealth, the same officer rules that certificates of receipts and expenditures under the Corrupt Practices Act and the Lobby Act, certificates to accompany labels under the Trade Mark Act, and certificates of the condition of cor- porations should be recorded by the Secretary, whether the proper stamps have been affixed or not. As to whether the persons filing such papers should stamp them the Attorney-General refuses to render an opinion, they not being officials of the government, and so not entitled to the learned rulings of this high officer. (5) It would seem that, upon the foregoing principles and sections impos- ing penalties, an omission to stamp such papers by the persons filing them may prove to be a serious matter. SCHEDULE B, In connection with Schedule B, and in determining what a package is, it has been held that where matches were put up in boxes, each having two compartments or drawers, and each compartment contained less than fifty matches, the entire box should be regarded as one parcel or package, (c) Circular No. 501 of July 7, 1898, is as follows : — "The liability of medicinal preparations to stamp tax is to be determined wholly by reference to the first paragraph of Schedule B, as construed and interpreted by the proviso of section 20 of the Act of June 13, 1898. "The first absolute prerequisite to the imposition of this tax is that the article should be medicinal in its character. It is to be (a) This opinion was given in July, 1898, but is not published. (6) This opinion was given in July, 1898, but is not published, (c) United States !'. Goldback, 1 Hughes, 529; 23 Int. Rev. Eec. 129. See 24 Id. 381 ; 3 Cin. L. Bnl. 1029. THE WAR REVENUE LAW OF 1898. 99 observed, however, that while some articles and substances are used exclusively, or nearly so, in materia tnedica, other articles and substances which are not so exclusively used, may become medicinal articles, subject to tax by being held out and specially advertised as remedies or specifics for any disease affecting the human or animal body. In this way certain articles usually re- garded in the class of foods or beverages may be placed in the category of taxable medicinal preparations. Soaps may also be placed in the category of taxable articles by being advertised as remedies or cosmetics. "There is a common error prevailing in the community to the effect that the tax on medicinal preparations is a tax exclusively on proprietary or patent medicines, or those put up under some trade- mark. Nothing could be further from the truth. The last sen- tence of the proviso to section 20 is held by this office to be a legislative construction and interpretation of Schedule B, and it brings within the purview of the law a vast variety of medicinal preparations which are not proprietary, patented, or trade-marked." "The last clause of section 20, Act of June 13, 1898, is as follows : — " 'The stamp taxes provided for in Schedule B of this Act shall apply to all medicinal articles compounded by any formula, pub- lished or unpublished, which are put up in style or manner similar to that of patent, trade-mark, or proprietary medicine in general, or which are advertised on the package or otherwise as remedies or specifics for any ailment, or as having any special claim to merit, or to any peculiar advantage in mode of preparation, quality, use, or effect.' " This is undoubtedly entitled to peculiar weight as a legislative interpretation of that part of Schedule B which relates to medicinal articles. " This office construes said clause as follows : — " 'Any medicinal article which is compounded by any formula, published or unpublished, ' will be held to be taxable under Sched- ule B, Act of June 13, 1898, when it is — " (1) ' Put up in style or manner similar to that of patent, trade- mark, or proprietary medicine in general, or,' "(2) 'Advertised on the package or otherwise as (a) remedies or specifics for any ailment, (b) as having any special claim to merit, as (c) having any peculiar advantage in mode of prepara- tion, quality, use, or effect.' "Under 1, any medicine will be held to be put up in ' style oi manner similar,' etc., when the package, carton, wrapper, label, 100 THE WAR REVENUE LAW OF 1898. bottle, or container resembles in one or more particulars any make or brand of ' patent, trade-mark, or proprietary medicine in general.' "For example, the use of a trade-mark upon medicine makes it taxable. Also, the use of the maimer's name or any other person's name in the possessive form immediately before the name of the medicine, as * Smith's Pills,' or the use of any name immediately following the name of the medicine. This shall not be construed, however, to prohibit the name of the physician who was the author of the formula immediately following the name of the medicine. Nor shall it be construed to prohibit the name of the manufacturer being blown in the bottle, or printed inconspicuously on the label or wrapper. " Under 2 (a) any medicinal article will be held to be ' advertised on the package or otherwise as remedies or specifics for any ailment ' if there is any statement whatever upon any part of the article of any 'disease or affection of the human or animal body ' for which the contents should or might be used. This shall not be construed, however, as prohibiting the printing of the formula and the dose on the label, or words indicating the theraupeutic action of the medi- cine in purely technical language not in common use. "Under 2 (b) and (c) any medicinal article will be held to be advertised on the package or otherwise as having any special claim to merit, or to any peculiar advantage in the mode of preparation, quality, use, or effect, when any description of it either on the pack- age or otherwise includes any statement to the effect that it has a special or peculiar merit or value over other like articles, or other articles of the same class. Or when it has any word, phrase, or sentence, either in the title, or formula, or otherwise, which indi- cates its superior merit over articles of its class. "For example, ' Tasteless Quinine, ' 'Improved Cod Liver Oil,' but this shall not be construed to exclude the words ' pure, ' ' chemi- cally pure,' etc., which have for their object the definition of the grade of the article, or the words ' granulated,' ' crystallized,' 'pressed,' 'resublimed,' etc., intended to indicate the manner of manufacture, and which indicate only well-known and established methods of manufacture. " RECAPITULATION. "1. All medicinal proiirietary articles and preparations must be stamped. "2. All medicinal patent articles and preparations must be stamped. THE WAE REVENUE LAW OF 1898. 101 "3. All medicinal trade-mark articles and preparations must be stamped. " 4. All medicinal articles compounded by any formula published or unpublished, which are put up in a style or manner similar to that of patent, trade-mark, or proprietary medicines in general, or which are advertised on the package or otherwise as remedies or specifics for any ailment, or as having any special claim to merit, or to any peculiar advantage in mode of preparation, quality, use, or effect, must be stamped. " 5. All medicinal articles or compositions whatsoever which if prepared by any formula published or unpublished, or held out or recommended to the public by the makers or vendors or proprietors thereof as proprietary articles Or preparations, or as remedies or specifics for any disease or diseases or affection whatever afiecting the human or animal body, must be stamped. "bulk packages. " Articles subject to stamp tax under Schedule B, Act of June 13, 1898, are equally liable to stamp tax when sold in what are termed bulk packages, as when sold in retail packages, and the value of the stamp or stamps to be affixed must correspond with and be pro- portionate to the price of a single retail package. " This ruling specially applies to bay rum and cologne waters, vaseline and petrolatum, which are taxable under the head of per- fumery and cosmetics, and to bitters and other medicines when sold in kegs, barrels, etc. "Dealers may retail directly to the consumer from such bulk packages as have been properly stamped by the manufacturer or importer, drawing from the same in quantities to suit their cus- tomers without any additional stamping, but the stamps attached to such bulk packages will only protect the original contents. " If bulk packages are broken up by the dealer drawing off the contents into smaller vessels to be put upon his shelves, or other- wise kept for future sales, the contents so drawn off thereby cease to be identified with the stamped package in which they were origi- nally put up by the manufacturer or sold by the importer, and such contents so put up become liable to seizure if stamps are not affixed to them. " The contents of bulk packages liable to tax under Schedule B, which were in the hands of retailers on the 1st day of July, 1898, and therefore unstamped, must be stamped when sold at retail from said packages proportionately to the retail price of the whole package. 102 THE WAR REVENUE LAW OF 1898. "samples. " Samples of medicinal preparations and perfumery and cosmetics taxable under Schedule B, may be removed from the place of manu- facture for free distribution without stamp or payment of tax. " Every sample so removed, however^ must have legibly printed thereon the fgllowing notice : — " ' This is a free sample removed from the factory for gratuitous distribution. Any person selling or exposing for sale this sample at any time will be liable to all the pains and penalties of the law denounced against persons selling or exposing for sale unstamped articles taxable under Schedule B, Act of June 13, 1898.' "articles on hand JULY 1, 1898. " The statute governing this matter is as follows : — " ' That all articles and preparations provided for in this schedule which are in the hands of manufacturers or wholesale or retail deal- ers on the first day of July, 1898, shall be subject to the payment of the stamp taxes herein provided for, but it shall be deemed a compliance with this Act as to such articles on hand in the hands of wholesale or retail dealers as aforesaid, who are not the manu- facturers tliereof, to affix the proper adhesive tax stamp at the time the packet, box, bottle, pot, or phial, or other inclosure with its contents is sold at retail. (Schedule B, Act of June 13, 1898.) ' " Under this provision it is held that articles liable to tax in the hands of a retail dealer who is not the manufacturer thereof, July 1, 1898, must be stamped by such retail dealer when he sells them at retail. In stamping such articles the retail price fixed by the man- ufacturer must be adhered to by the retail dealer. "Articles liable to tax in the hands of wholesale dealers who are not the manufacturers thereof on the 1st day of July, 1898, may be sold by such wholesale dealer to other wholesale dealers or to retail dealers without stamping the same, the obligation to stamp being limited to sales at retail . " All articles in tlie hands of manufacturers on said date liable to tax must be stamped before removal from the place of manufacture. "Dealers in stamping articles on hand July 1, 1898, when sold at retail, must adhere to the retail price as fixed by the manufac- turer and stamp the article accordingly, and not according to some 'cut price.' "retail pkice. "The manufacturer or importer must fix the retail price or value of the taxable articles under Schedule B manufactured or THE WAE REVENUE LAW OF 1898. 103 imported by him, aud affix the corresponding adhesive stamps to the same before removal from the place of manufacture or importa- tion. This duty is imposed on the manufacturer or importer by law. It is believed that no one is so competent as he to determine the retail price or value of his products or importations, and he will be held strictly responsible for a due compliance with tlie statute. "This retail price or value is a price such as a single package or other small quantity would be sold at to consumers at the place of manufacture. If the manufacturer fixes the retail price in good faith according to this rule, he need apprehend no complaint if at different times and in different places the article is retailed for a greater or less sum than denoted by the stamps affixed theretQ. "EZPOET — ARTICLES EXPORTED WITHOUT STAMPING, AXD DRAW- BACK ON STAMPED ARTICLES EXPORTED. "Articles liable to tax under Schedule B, when intended for exportation, may.be manufactured and sold or removed without having the stamps affixed thereto, and without being charged with tax as aforesaid by giving bonds and complying with regulations to be provided by the Commissioner of Internal Revenue, and ap- proved by the Secretary of the Treasury. See proviso to section 22, Act of June 13, 1898. An allowance of drawback on articles mentioned in Schedule B, which have alread}'' been stamped and afterwards exported, is allowed by sectioji 26, Act of June 13, 1898, which reads as follows : — " ' Sect. 26. There shall be an allowance of drawback on arti- cles mentioned in Schedule B of this Act on which any internal revenue tax shall have been paid, equal in amount to the stamp tax paid thereon, and no more, when exported, to be paid by the warrant of the Secretary of the Treasury on the Treasurer of the United States, out of any money arising from internal taxes not otherwise appropriated : Provided, That no allowance of drawback shall be made for any such articles exported prior to July first, eighteen hundred and ninety-eight. The evidence that any such tax has been paid as aforesaid shall be furnished to the satisfaction of the Commissioner of Internal Revenue by the person claiming the allowance of drawback, and the amount shall be ascertained under such regulations as shall be prescribed from time to time by said Commissioner, with the approval of the Secretary of the Treasury.' "Regulations made in pursuance of the foregoing provisions 104 THE WAR REVENUE LAW OF 1898. entitled Series 7, No. 24, are now ready and will be furnished to parties interested on application to collectors of internal revenue. "imported articles. "All medicinal articles and perfumeries and cosmetics imported from foreign countries are liable to tlie stamp tax as similar arti- cles of domestic manufacture, in addition to tlie import duty on tlie same, and the stamps must be affixed by the owner or importer before the same are sold or offered for sale, and affixed in the same manner upon every packet, box, bottle, phial, or other inclosure containing the same. "No exception is made in this respect for articles sold in origi- nal and unbroken packages in which the bottles or other inclosures were packed by the manufacturer before the importation. All such must be unpacked for the j)urpose of stamping the primary pack- age. Importers may, however, supply manufacturers abroad with internal revenue stamps to be there affixed and cancelled, to the respective articles, before shipment. "collectors to make examinations. "Collectors and revenue agents will make examinations of the retail drug stores, pharmacies, and other places in their districts, to ascertain if the medicinal articles and other articles mentioned in Schedule B, contained in stock and offered for sale, are stamped according to law wherever liable under the foregoing instructions. "In cases where the officer is not able to determine liability to tax, or where there is reasonable doubt, samples should be sent to this office for decision. Samples sent for this purpose should in- clude all wrappings, circulars, advertisements, etc., pertaining to the sample in question, and should be accompanied by a letter of transmission giving full information concerning the same." " Sect. 26. There shall be an allowance of draw- back on articles mentioned in Schedule B of this Act on which any internal-revenue tax shall have been paid, equal in amount to the stamp tax paid thereon, and no more, when exported, to be paid by the warrant of the Secretary of the Treasury on the Treasurer of the United States, out of any money arising from internal THE WAR REVENUE LAW OF 1898. 105 taxes not otherwise appropriated : Provided, That no allowance of drawback shall be made for any such arti- cles exported prior to July first, eighteen hundred and ninety-^ght. The evidence that any such tax has been paid as aforesaid shall be furnished to the satisfaction of the Commissioner of Internal Revenue by the person claiming the allowance of drawback, and the amount shall be ascertained under such regulations as shall be prescribed from time to time by said Commissioner, with the approval of the Secretary of the Treasury." " Excise Taxes on Persons, Firms, Companies, and Cor- porations engaged in Refining Petroleum and Sugar. — Sect. 27. That every person, firm, corporation, or com- pany carrying on or doing the business of refining pe- troleum, or i-efining sugar, or owning or controlling any pipe line for transporting oil or other products, whose gross annual receipts exceed two hundred and fifty thousand dollars, shall be subject to pay annually a special excise tax equivalent to one-quarter of one per centum on the gross amount of all receipts of such per- sons, firms, corporations, and companies in their respec- tive business in excess of said sum of two hundred and fifty thousand dollars. " And a true and accurate return of the amount of gross receipts as aforesaid shall be made and rendered monthly by each of such associations, corpoi'ations, companies, or persons to the collector of the district in which any such association, corporation, or company may be located, or in which such person has his place of business. Such return shall be verified under oath by the person making the same, or, in case of corpora- tions, by the president or chief officer thereof. Any person or officer failing or refusing to make return as 1C6 THE WAR REVENUE LAW OF 1898. aforesaid, or who shall make a false or fraudulent re- turn, shall be liable to a penalty of not less than one thousand dollars and not exceeding ten thousand dol- lars for each failure or refusal to make return as aforesaid and for each and every false or fraudulent return." («) This section was principally taken from the Acts of June 30, 1864, oh. 173, § 79 ; and of March 3, 1865, ch. 78, § 8 (13 Stats. 484). " Sect. 28. That from and after the first day of July, eighteen hundred and ninety-eight, a stamp tax of one cent shall be levied and collected on every seat sold in a palace or parlor car and on every berth sold in a sleeping car, the stamp to be affixed to the ticket and paid by the company issuing the same." ' ' To Collectors and Internal Sevenue Agents : — "Hereafter in making examinations of the files of telegraph companies and sleeping-car companies to ascertain if the law has been complied with with reference to stamping telegrams and sleeping-car tickets, you are advised that such examination should be restricted to simply ascertaining if the documents referred to have been properly stamped. "These instructions are particularly applicable to telegrams where neither the public good nor the safety of the revenues re- quires that they should be delivered to the examining officer. In such cases it is not expected that all the telegrams sent by the company from any one point should be examined. Such examinations will be considered ample if sufficient telegrams cf any date called for by the examining officer are passed through the hands of a representative of the company in the presence of the examining officer in such a manner as to enable him to see that they are properly stamped. A knowledge of the contents of the telegrams is not essential to the examining officer." (b) (a) Compare provisions concerning the returns to be made by manufacturers of tobacco and cigars, supra, pp. 22, 26. See general provisions regarding special tax payers, supra, p. 7 et seq. {h) Circular No, 506 of July 28, 1898. THE WAR REVENUE LAW OF 1898. 107 "Legacies and Distributive Shares of Personal Prop- erty. — Sect. 29. That any person or persons having in charge or trust, as administrators, executors, or trustees, any legacies or distributive shares arising from personal property, where the whole amount of such personal property as aforesaid shall exceed the sum of ten thou- sand dollars in actual value, passing, after the passage of this Act, from any person possessed of such property, either by will or by the intestate laws of any State or Territory, or any personal property or interest therein, transferred by deed, grant, bargain, sale, or gift, made or intended to take effect in possession or enjoyment after the death of the grantor or bargainer, to any person or persons, or to any body or bodies, politic or corporate, in trust or otherwise, shall be, and hereby are, made subject to a duty or tax, to be paid to the United States, as follows — that is to say : Where tlie whole amount of said personal property shall exceed in value ten thousand and shall not exceed in value the sum of twenty-five thousand dollars the tax shall be : " First. Where the person or persons entitled to any beneficial interest in such property shall be the lineal issue or lineal ancestor, brother, or sister to the person who died possessed of such property, as afore- said, at the rate of seventy-five cents for each and every hundred dollars of the clear value of such interest in such property. " Second. Where the person or persons entitled to any beneficial interest in such property shall be the de- scendant of a brother or sister of the person who died possessed, as aforesaid, at the rate of one dollar and fifty cents for each and every hundred dollars of the clear value of such interest. 108 THE WAR REVENUE LAW OF 1898. " Third. Where the person or persons entitled to any beneficial interest in siich property shall be the brother or sister of the father or mother, or a descendant of a brother or sister of the father or mother, of the person who died possessed as aforesaid, at the rate of three dollars for each and every hundred dollars of the clear value of such interest. "Fourth. Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister of the grandfather or grandmother, or a descendant of the brother or sister of the grandfather or grandmother, of the person who died possessed as aforesaid, at the rate of four dollars for each and every hundred dollars of the clear value of such interest. " Fifth. Where the person or persons entitled to any beneficial interest in such property shall be in any other degree of collateral consanguinity than is hereinbefore stated, or shall be a stranger in blood to the person who died possessed, as aforesaid, or shall be a body politic or corporate, at the rate of five dollars for each and every hundred dollars of the clear value of such interest : Pro- vided, That all legacies or property passing by will, or by the laws of any State or Territory, to husband or wife of the person died possessed, as aforesaid, shall be exempt from tax or duty. Where the amount or value of said property shall exceed the sum of twenty-five thousand dollars, but shall not exceed the sum or value of one hundred thou- sand dollars, the rates of duty or tax above set forth shall be multiplied by one and one-half ; and where the amount or value of said property shall exceed the sum of one hundred thousand dollars, but shall not exceed the sum of five hundred thousand dollars, such rates of duty THE WAR REVENUE LAW OF 1898. 109 shall be multiplied by two ; and where the amount or value of said property shall exceed the sum of five hun- dred thousand dollars, but shall not exceed' the sum of one million dollars, such rates of duty shall be multi- plied by two and one-half ; and where the amount or value of said property shall exceed the sum of one mil- lion dollars, such rates of duty shall be multiplied by three. This section was principally taken from the Acts of July 1, 1862 (12 Stats. 485); of June 30, 1864, ch. 173, § 125 (13 Stats. 286); of March 5, 1865 (13 Stats. 481); of July 13, 1866, ch. 184, § 9 (14 Stats. 140); of July 14, 1870, ch. 255, §§ 3, 27 (16 Stats. 256, 269); and of Dec. 24, 1872, ch. 13, § 2 (17 Stats. 402). " Succession tax " on every " devolution of title to real estate " is not a "direct tax" within the meaning of the constitution, but an "import "or "excise," and is constitutionally valid. "Suc- cessor " is employed in the Act as the correlative of predecessor. The subject-matter of the assessment is the devolution of the estate, or the right to become beneficially entitled to the same or the in- come thereof in possession or expectancy. Such a tax is neither a tax on land nor a capitation exaction, (a) A tax on collateral in- heritances is not a tax on property, but on the privilege of succeed- ing to the inheritance. (6) An inheritance may be taxed as a privilege, although the property may also be taxed, (c) Such duties are a charge upon the income of the cestui que trust, under a will made before the passage of the statute which be- queaths a fund to trustees "to receive and collect the income and (a) Scholey v. Kew, 23 Wall. 331. Other authorities on legacy and succession taxes are United States v. New York Life Ins. & Trust Co., 9 Ben. 413 ; Hell- man V. United States, 15 Blatch. 13 ; United States v. Watts, 1 Bond, 580; United States V. Hazard, 14 Phila. 486 ; 8 F. R. 380 ; United States u. Townsend, 14 Phila. 493 ; 8 T. E. 306 ; United States v. Brice, Id. 487 ; 8 F. R. 381 ; May v. Slack, 16 Int. Rev. Eec. 134; United States u. Leverich, 9 F. R. 586 ; .United States V. Hunnewell, 13 Id. 617; Mason v. Sargent, 104 U. S. 689, reversing 23 Int. Rev. Rec. 155; Sturges u. United States, 117 U. S. 363; United States v. Rankin, 8 F. E. 872 ; United States i: Morris, 27 Id. 341 ; United States v. Kelly, 28 Id. 845 ; United States v. Truck, Id. 846 ; Clapp v. Mason, 94 U. S. 589 ; United States v. Hart, 4 F. E. 292. (6) Eyre v. Jacob, 14 Gratt. 422. See Williams' Case, 3 Bland Ch. 186; Tyson v. State, 28 Md. 577. (c) Eyre v. Jacob, supra. 110 THE WAR EEVENUE LAW OF 1898. produce thereof, and after deducting all needful and proper costs, etc., to pay the residue of said income " to the beneficiary, (a) In a case brought under the provisions of ?§ 126-137 of the Act of June 30, 1864, (h) it was held that the person liable to pay a tax on a succession is the person beneficially interested in the property, and not the trustee or executor in whom the legal title is vested, or to whom a power in trust is given for the benefit of the beneficiary, (o) " The Act of 1862, [d) so far as it imposes a tax in personam, imposes it on the executor or trustee, and not on the legatee or cestuis que trust, and no suit in personam can be maintained against the legatee. " (e) No legacy duty is collectible, under the Act of June 30, 1864, on a legacy which did not become payable until after the repeal of the law imposing such duties. (/) A legacy payable in cash from a fund to be raised by a sale of lands, is not subject to a tax imposed upon legacies arising from personal property, {g) Where moneys were received by claimants under a will by virtue of a compromise contract with the executor, it was held that this is not a legacy or a distributive share, such as is liable to the tax, under the Internal Revenue Laws, (h) "In Great Britain it has been determined, upon much considera- tion by the highest authority, that an Act of Parliament imposing a legacy duty does not apply to property of a person whose domicile at the time of his death is not within the realm." (i) "In the courts of North Carolina and of Missouri, on the other hand, it has been held that all personal property within the State is liable to such a duty, whether the owner's domicile at the time of his death is within or without the State." {j) "Congress, in the Act of 1864, has made its intention clear that the legacy duty should be (a) Sohier v. Eldridge, 103 Mass. 345. (6) 13 Stats. 287. (c) United States v. Tappan, 10 Ben. 284. (d) 12 Stats. 485. (e) United States v. Alien, 9 Ben. 154. (/) Mason v. Sargent, 104 U. S. 689 ; United States <:. Hazard. 8 F. R. 380 ; United States v. N. Y. Life Ins. & Trust Co., 9 Ben. 413. On the construction and effect of the Act of .Tune 30, 1864, ch. 255, §§ 124, 125, imposing a succession tax and legacy duty, see United States u. Hunnewell, 13 F. E. 617, and note, p. 618. ((/) United States !•. Watts, 1 Bond, 580. (h) Page V. Rives, 1 Hughes, 297. (i) Mr. Justice Gray, in United States v. Hunnewell, 13 F. E. 617 ; Thomson V. Advocate-General, 12 Clark & F. 1. (,;■) Mr. Justice Gray, in United States v. Hunnewell, 13 F. R. 617; Alvany u. Powell, 2 Jones Eq. 31 ; State v. St. Louis County Court, 47 Mo. 594. THE WAR EEVEXUE LAW OF 1S98. HI payable on the estates of those persons only whose domicile at the time of their death is within the United States. Section 124 im- poses a duty on legacies or distributive shares arising from per- sonal property 'passing from any person possessed of such property, either by will or by the intestate laws of any State or Terri- tory.' " (a) It is to be noticed that the statutory words quoted are followed in section 29 of the present Act. The Act of Congress (b) does not make the duty payable when • the person possessed of such property " dies testate, if it would not be payable in case such person died intestate ; and if a woman dies intestate, her heir tates a distributive share by the intestate laws of the place of her domicile at the time of her death, (c) (a) Mr. Justice Gray, in United States v. Hmmewell, 13 F. E. 617. (5) Of Jnne 30, lS6i, eh. 255. (c) United States r. Hnnnewell, 13 F. E. 617. On devises and remainders over, see ilason v. Clapp, 1 Holmes, 417 : s. c. ^1 Int. Eev. Bee. 268 ; Jlay v. Slack, 16 Id. 134 ; Blake v. McCartney, 4 Cliff. 101 ; >. L. 10 Int. Eev. Bee 131 ; Wright v. Blakeslee, 101 U. S. 174; Clapp r. Mason, 94 U. S. 5S9 ; s. 0. 23 Int. Eev. Bee, 144 ; Bruae v. Smith, 13 Int. Bev. Bee. 54; United States t. S. Y. Life & T. Co., 9 Ben. 413; Galbraith v. Commonwealth, 14 Penn. St. 25S. On devises in trust, see Hathaway v. Fish, 13 AUen, 267 ; Dnvall v. English Evang. L. Church, 53 X. Y. 500 ; Commonwealth i: Williams, 13 Penn. St 29 ; Commonwealth's Appeal, 34 Id. 204. On legacy taxes, successions, liability, see Alvany i'. Powell, 2 Jones, Eq. 51 ; Page V. Eives, 1 Hughes, 297 ; Barringer v. Cowan, 2 Jones, Eq. 436 ; iMager v. Grima, S How. 490 ; United States (/. Watts, 1 Bond, 550 ; HeUraan v. United States, 15 Blatch. 13 ; Clapp r. ilason, 94 U. S. 5S9 ; 5. c. 23 Int. Bev. Bee. 144 ; ilason r. Sargent, 104 U. S. 6«9 ; s. c. 23 Int. Eev. Bee. 155; May v. Slack, 16 Int. Bev. Eec. 134 ; United States t: Tappan, 10 Ben. 284 ; Wright r. Blakeslee, 13 Blatch. 421 ; Scholey c. Bew, 23 WalL 331 ; Wilhelmi r. Wade, 65 Mo. 39; Eansom r. United States, S Eeporter, 164; Tharp v. Commonwealth, 5S Penn. St. 500 ; ilcDowell v. Addams, 45 Id. 430 ; Commonwealth v. Xancrede, -32 Id. 389 ; United States v. Xew York Life Ins. & T. Co., 9 Ben. 413 ; s. c. 24 Int. Eev. Eec 118; Eyre v. Jacob, 14 Grat. 422. See Williams' Case, 3 Bland, Ch. 1S6 ; Tyson v. State, 2S Md. 577. For the course of decisions determining whether a legacy or succession tax was chargeable on the property in interest is a question under the peculiar cir- cumstances of the particular case, see Scholey c. Bew, 23 Wall. 331 ; Clapp v. ilason, 94 U. S. 559 : Wright v. Blakeslee, 101 U. S. 174 ; 13 Blatch. 421 ; United States r. X. Y. Life Ins. & Tmst Co., 9 Ben. 413 ; 24 Int. Eev. Bee. 1 IS ; Mason r. Clapp, 1 Holmes, 417 ; 16 Int. Eev. Eec. 134 ; Blake v. McCartney, 4 Cliff. 101 HeUman > . United States, 15 Blatch. 13 : Bausom r. United States, 8 Bep. 164 United States r. Leverieh, 9 F. B. 586 ; United States v. Townsend, 8 F. E. 306 Brune v. Smith, 13 Int. Bev. Bee. 54 ; United States v. Hart, 4 F. E. 292 ; United States 1-. Banks, 17 F. B, 322 ; United States v. Bankin, 8 F. E. S72. 112 THE WAR REVENUE LAW OF 1898. " Sect. 30. That the tax or duty aforesaid shall be a lien and charge upon the property of every person who may die as aforesaid for twenty years, or until the same shall, within that period, be fully paid to and discharged by the United States ; and every executor, administrator, or trustee, before payment and distri- bution to the legatees, or any parties entitled to bene- ficial interest therein, shall pay to the collector or deputy collector of the district of which the deceased person was a resident the amount of the duty or tax assessed upon such legacy or distributive share, and shall also make and render to the said collector or deputy collector a schedule, list, or statement, in dupli- cate, of the amount of such legacy or distributive share, together with the amount of duty which has accrued, or shall accrue, thereon, verified by his oath or affirmation, to be administered and certified thereon by some magistrate or officer having lawful power to administer such oaths, in such form or manner as may be prescribed by the Commissioner of Internal Revenue, which schedule, list, or statement shall contain the names of each and every person entitled to any bene- ficial interest therein, together with the clear value of such interest, the duplicate of which schedule, list, or statement shall be by him immediately delivered, and the tax thereon paid to such collector ; and upon such payment and delivery of such schedule, list, or state- ment said collector or deputy collector shall grant to such person paying such duty or tax a receipt or receipts for the same in duplicate, which shall be pre- pared as hereinafter provided. Such receipt or receipts, duly signed and delivered by such collector or deputy collector, shall be sufficient evidence to entitle such THE WAR EEVE^rUE LAW OF 1898. 113 executor, administrator, or trustee to be credited and allowed such payment by every tribunal which, by the laws of any State or Territory, is, or may be, em- powered to decide upon and settle the accounts of executors and administrators. And in case such ex- ecutor, administrator, or trustee shall refuse or neglect to pay the aforesaid duty or tax to the collector or deputy collector, as aforesaid, within the time herein- before provided, or shall neglect or refuse to deliver to said collector or deputy collector the duplicate of the schedule, list, or statement of such legacies, property, or personal estate, under oath, as aforesaid, or shall neglect or refuse to deliver the schedule, list, or state- ment of such legacies, property, or personal estate, under oath, as aforesaid, or shall deliver to said collector or deputy collector a false schedule or state- ment of such legacies, property, or personal estate, or give the names and relationship of the persons entitled to beneficial interests therein untruly, or shall not truly and correctly set forth and state therein the clear value of such beneficial interest, or where no administration upon such property or per- sonal estate shall have been granted or allowed under existing laws, the collector or deputy collector shall make out such lists and valuation as in other cases of neglect or refusal, and shall assess the duty thereon ; and the collector shall commence appropriate proceed- ings before any court of the United States, in the name of the United States, against such person or persons as may have the actual or constructive custody or posses- sion of such property or personal estate, or any part thereof, and shall subject such property or personal estate, or any portion of the same, to be sold upon the 114 THE WAR REVENUE LAW OF 1898. judgment or decree of such court, and from the pro- ceeds of such sale the amount of such tax or duty, tegether with all costs and expenses of every descrip- tion to be allowed by such court, shall be first paid, and the balance, if any, deposited according to the order of such court, to be paid under its direction to such person or persons as shall establish title to the same. The deed or deeds, or any proper conveyance of such property or personal estate, or any portion thereof, so sold under such judgment or decree, exe- cuted by the officer lawfully charged with carrying the same into effect, shall vest in the purchaser thereof all the title of the delinquent to the property or personal estate sold under and by virtue of such judgment or decree, and shall release every other portion of such property or personal estate from the lien or charge thereon created by this Act. And every person or persons who shall have in his possession, charge, or custody any record, file, or paper containing, or sup- posed to contain, any information concerning such property or personal estate, as aforesaid, passing from any person who may die, as aforesaid, shall exhibit the same at the request of the collector or deputy collector of the district, and to any law officer of the United States, in the performance of his duty under this Act, his deputy or agent, who may desire to examine the same. And if any such person, having in his posses- sion, charge, or custody any such records, files, or papers, shall refuse or neglect to exhibit the same on request, as aforesaid, he shall forfeit and pay the sum of five hundred dollars : Provided, That in all legal controversies where such deed or title shall be the subject of judicial investigation, the recital in said THE WAR REVENUE LAW OF 1898. 115 deed shall be prima facie evidence of its truth, and that the requirements of the law had been complied with by the officers of the Government." This section is taken principally from the Act of June 30, 1864, ch. 173, § 126 (13 Stats. 286). " In pursuance of the requirements of the above Act and by vir- tue of the authority conferred thereby, the following rules and regulations are hereby prescribed : — " The tax on legacies and distributive shares of personal prop- erty accrues where passing from any person dying on or after June 13, 1898. " The law does not apply to estates now in process of settlement, when the grantor died before June 13, 1898. " The tax must be paid on a legacy before its distribution to the legatees. "ISTo tax is due unless the whole amount of said personal prop- erty passing from the decedent exceeds in value ten thousand dollars. " The fact that certain distributive shares arising from the per- sonal property of an estate are represented by bonds of the United States does not constitute ground for holding such shares to be exempt from tax on legacies and distributive shares under the internal-revenue laws. (24 Int. Rev. Rec. 33.) " In all cases where legacy taxes are due, the executors, admin- istrators, or trustee should be immediately notified to make return on Eorm No. 419. "These returns should be made in duplicate. One copy should be filed in the office of the collector and the other should be trans- mitted to this office. " Upon payment of the tax the collector or deputy collector will give a receipt or receipts for the same in duplicate. This receipt may be given on Eorm No. 1. " If it is found that the returns are apparently correct, the taxes due should be reported on Eorm 23 for assessment. "In transmitting returns to this office the collector will make a list or schedule thereof on Form 421. " If the party whose duty it is to make a legacy-return neglects or refuses to do so, the collector should make a statement of tax due on Form No. 419 and send it to this office. " If the collector finds it necessary, in order to obtain the facts respecting liability to legacy taxes where the records are insuffi- 116 THE WAE REVENUE LAW OF 1898. cient, lie can exercise the authority vested in him by section 3173, Revised Statutes, and also by section 3163, as amended by section 1 of the Act of August 16, 1876, and may summon the executors, administrators, or other persons he may deem proper, to appear and testify under oath." (a) " Sect. 31. That all administrative, special, or stamp provisions of law, including the laws in rela- tion to the assessment of taxes, not heretofore spe- cifically repealed, are hereby made applicable to this Act." Section 3420 of the Revised Statutes provides that all bank checks, drafts, or orders as aforesaid, issued by the officers of the United States Government, or by officers of any State, county, town, or other municipal corporation, are exempt from taxation: Provided, That it is the intent hereby to exempt from liability to taxation such State, county, town, or other municipal corporations in the exercise only of functions strictly belonging to them in their ordinary governmental and municipal capacity, (b) The Act of March 3, 1883, repealing the stamp tax on bank checks, etc., does not appear to specifically repeal the above section, and it would seem as if it were in operation by the provisions of section 31. The Commissioner has just ruled that checks drawn by officers of States, counties, and municipalities for the discharge of the obli- gations of such, and of United States disbursing officers in dis- charge of their official duties, are exempt, (c) By the Act of March 3, 1875, ch. 127, § 6, (d) stamps are not required on savings- bank receipt-books, (e) " Sect. 32. That the Secretary of the Treasury is authorized to borrow from time to time, at a rate of interest not exceeding three per centum per annum, such sum or sums as, in his judgment, may be neces- (a) Regulations and Instructions concerning the Tax on Legacies and Dis- tributive Shares (Series 7, No. 3, Revised), United States Internal Revenue, issued June 20, 1898. (6) See United States v. Mann, 95 U. S. .580. (c) See Commissioner's rulings cited under section 25. (d) 18 Stats. 340. (e) See United States v. Mann, 95 U. S. 580. THE WAR REVENUE LAW OF 1898. 117 sary to meet public expenditures, and to issue therefor certificates of indebtedness in such form as he may pre- scribe and in denominations of fifty dollars or some multiple of that sum ; and each certificate so issued shall be payable, with the interest accrued thereon, at such time, not exceeding one year from the date of its issue, as the Secretary of the Treasury may prescribe : Provided, That the amount of such certificates out- standing shall at no time exceed one hundred millions of dollars ; and the provisions of existing law respect- ing counterfeiting and other fraudulent practices are hereby extended to the bonds and certificates of indebt- edness authorized by this Act." This section is taken principally from the Acts of June 30, 1864, ch. 172, § 1 (13 Stats. 218); and of March 3, 1865, ch. 77 (13 Stats. 469). " Sect. 33. That the Secretary of the Treasury is hereby authorized to borrow on the credit of the United States from time to time as the proceeds may be re- quired to defray expenditures authorized on account of the existing war (such proceeds when received to be used only for the purpose of meeting such war expenditures) the sum of four hundred million dollars, or so much thereof as may be necessary, and to prepare and issue therefor, coupon or registered bonds of the United States in such form as he may prescribe, and in de- nominations of twenty dollars or some multiple of that sum, redeemable in coin at the pleasure of the United States after ten years from the date of their issue, and payable twenty years from such date, and bearing in- terest payable quarterly in coin at the rate of three per centum per annum; and the bonds herein authorized 118 THE WAR REVENUE LAW OF 1898. shall be exempt from all taxes or duties of the United States, as well as from taxation in any form by or un- der State, municipal, or local authority : Provided, That the bonds authorized by this section shall be first offered at par as a popular loan under such regulations, pre- scribed by the Secretary of the Treasury, as will give opportunity to the citizens of the United States to par- ticipate in the subscriptions to such loan, and in allot- ting said bonds the several subscriptions of individuals shall be first accepted, and the subscriptions for the lowest amounts shall be first allotted : Provided further, That any portion of any issue of said bonds not sub- scribed for as above provided may be disposed of by the Secretary of the Treasury at not less than par, un- der such regulations as he may prescribe, but no com- missions shall be allowed or paid thereon ; and a sum not exceeding one-tenth of one per centum of the amount of the bonds and certificates herein authorized is hereby appropriated out of any money in the Treas- ury not otherwise appropriated, to pay the expense of preparing, advertising, and issuing the same." This section was taken principally from the Act of June 30, 1864, ch. 172, § 1 (13 Stats. 218). "Coinage of SUver Bullion.— Sect. 34. That the Sec- retary of the Treasury is hereby authorized and directed to coin into standard silver dollars as rapidly as the public interests may require, to an amount, however, of not less than one and one-half millions of dollars in each month, all of the silver bullion now in the Treas- ury purchased in accordance with the provisions of the Act approved July fourteenth, eighteen hundred and ninety, entitled ' An Act directing the purchase of sil- THE WAR REVENUE LAW OF 1898. 119 ver bullion and the issue of Treasury notes thereon, and for other purposes,' and said dollars, when so coined, shall be used and applied in the manner and for the purposes named in said Act." This section is taken principally from the Acts of Jan. 18, 1837; of June 22, 1874, oh. 419 (18 Stats. 202); of Feb. 28, 1878, ch. 20 (20 Stats. 25); of July 14, 1890, ch. 708 (26 Stats. 289); and of Nov. 1, 1893, ch. 8 (28 Stats. 4). "Mixed Flour. — Sect. 35. That for the purposes of this Act the words ' mixed flour ' shall be understood to mean the food product made from wheat mixed or blended in whole or in part with any other grain or other material, or the manufactured product of any other grain or other material than wheat." " Sect. 36. That every person, firm, or corporation, before engaging in the business of making, packing, or repacking mixed flour, shall pay a special tax at the rate of twelve dollars per annum, the same to be paid and posted in accordance with the provisions of sec- tions thirty-two hundred and forty-two and thirty-two hundred and thirty-nine of the Revised Statutes, and subject to the fines and penalties therein imposed for any violation thereof." Manufacturers or Packers of Mixed Flour shall pay These persons are not liable for this tax until on and after August 12, 1898. (a) " Sect. 37. That every person, firm, or corporation making, packing, or repacking mixed flour shall plainly mark or brand each package containing the same with (n) Circular No. 497 of June 25, 1898. See provisions regarding otlier special tax payers, supra. 120 THE WAR EEVENUE LAW OF 1898. the words ' mixed flour ' in plain black letters not less than two inches in length, together with the true weight of such package, the names of the ingredients composing the same, the name of the maker or packer, and the place where made or packed. In addition thereto, such maker or packer shall place in each pack- age a card not smaller than two inches in width by- three inches in length, upon which shall be printed the words ' mixed flour,' together with the names of the ingredients composing the same, and the name of the maker or packer, and the place where made or packed. Any person, firm, or corporation making, packing, or repacking mixed flour hereunder, failing to comply with the provisions of this section, shall be deemed guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than two hun- dred and fifty dollars and not more than five hundred dollars, or be imprisoned not less than sixty days nor more than one year." The words "with intent to defraud," etc., or their equivalent do not appear in this section, (a) " Sect. 38. That all sales and consignments of mixed flour shall be in packages not before used for that purpose ; and every person, firm, or corporation knowingly selling or offering for sale any mixed flour in other than marked and branded packages, as required by the provisions of this Act relating to the manufacture and sale of mixed flour, or who packs in any package or packages any mixed flour in any manner contrary to the provisions relating to the manufacture and sale of mixed flour of this Act, or who falsely marks or brands (a) See supra, p. 31, n. THE WAR REVENUE LAW OF 1898. 121 any package or packages containing mixed flour, or un- lawfully removes such marks or brands, shall, for each such offence, be punished by a fine of not less than two hundred and fifty dollars and not more than five hun- dred dollars, or by imprisonment not less than thirty days nor more than one year." In this section "knowingly" appears, which may be tantamount to "with intent to defraud." (a) " Sect. 39. That in addition to the branding and marking of mixed flour as herein provided, there shall be affixed to the packages containing the same a label in the following words : 'Notice. — The (manufacturer or packer, as the case may be) of the mixed flour herein contained has complied with all the requirements of law. Every person is cautioned not to use this package or label again or to remove the contents without de- stroying the revenue stamp thereon, under the penalty prescribed by law in such cases.' Every person, firm, or corporation failing or neglecting to affix such label to any package containing mixed flour made or packed by him or them, or who removes from any such pack- age any label so affixed, shall, upon conviction thereof, be fined not less than fifty dollars for each label so removed." Compare this provision with what is required of cigar manu- facturers, (b) The words " with intent," etc., do not appear here, (c) " Sect. 40. That barrels or other packages in which mixed flour may be packed shall contain not to exceed one hundred and ninety-six pounds ; that upon the man- Co) Supra, p. 31, n. (i) Supra, p. 22. (c) Supra, p. 31. 122 THE WAR REVENUE LAW OF 1898. ufacture and sale of mixed flour there shall be levied a tax of four cents per barrel or other package containing one hundred and ninety-six pounds or more than ninety- eight pounds ; two cents on every half barrel or other package containing ninety-eight pounds or more than forty-nine pounds ; one cent on every quarter barrel or other package containing forty-nine pounds or more than twenty-four and one-half pounds ; and one-half cent on every one-eighth barrel or other package containing twenty-four and a half pounds or less, to be paid by the person, firm, or corporation making or packing said flour. The tax levied by this section shall be represented by coupon stamps, and the provisions of existing laws gov- erning the engraving, issue, sale, accountability, efface- ment, and destruction of stamps relating to tobacco and snuff shall, so far as applicable, be made to apply to stamps provided in this section : Provided, That when mixed flour, on the manufacture and sale of which the tax herein imposed has been. paid, is sold and then repacked without the addition of any other material, such re- packed flour shall not be liable to any additional tax ; but the packages containing such repacked flour shall be branded or marked as required by the provisions of section thirty-seven of this Act, and shall contain the card provided for in section thirty-seven hereof ; and in addition thereto the person, firm, or corporation repack- ing mixed flour shall place on the packages containing the same a label in the following words : ' Notice. — The contents of this package have been taken from a regular statutory package, upon which the tax has been duly paid.' Any person violating the provisions of this section shall, upon conviction thereof, be punished by a fine of not less than two hundred and fifty dollars THE WAR REVENUE LAW OF 1898. 123 and not more than five hundred dollars, or by impris- onment not to exceed one year." "Sect. 41. That whenever any person, firm, or cor- poration sells, consigns, or removes for sale, consign- ment, or consumption any mixed flour upon which the tax required by this Act has not been paid, it shall be the duty of the Commissioner of Internal Revenue, for a period of not more than one year after such sale, con- signment, or removal, upon satisfactory proof, to esti- mate the amount of tax which should have been paid, and to make an assessment therefor and certify the same to the collector of the proper district. The tax so assessed shall be in addition to the penalties imposed by this Act for an unauthorized sale or removal." (a) " Sect. 42. That all mixed flours, imported from foreign countries, shall, in addition to any import duties imposed thereon, pay an internal-revenue tax equal in amount to the tax imposed under section forty of this Act, such tax to be represented by coupon stamps, and the packages containing such imported mixed flour shall be marked, branded, labelled, and stamped as in the case of mixed flour made or packed in the United States. Any person, firm, or corporation purchasing or receiving for sale or repacking any such mixed flour which has not been branded, labelled, or stamped, as required by this Act, or which is contained in packages which have not been marked, branded, labelled, or stamped as required by this Act, shall, upon conviction, be fined not less than fifty dollars nor more than five hundred dollars." The words "with intent," etc., do not appear here, (h) (a) See, for provisions regarding assessments, supra, pp. 5, 22. (b) See supra, p. 31. 124 THE WAR REVENUE LAW OF 1898. "Sect. 43. That any person, firm, or corporation knowingly purchasing or receiving for sale or for re- packing and resale any mixed flour from any maker, packer, or importer, who has not paid the tax herein provided, shall, for each offence, be fined not less than fifty dollars, and forfeit to the United States all the articles so purchased or received, or the full value thereof." " Knowingly " appears here, (a) " Sect. 44. That mixed flour may be removed from the place of manufacture or from the place where packed for export to a foreign country without pay- ment of tax or affixing stamps or label thereto, under such regulation and the filing of such bond and other security as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may pre- scribe. Every person, firm, or corporation who shall export mixed flour shall plainly mark on each package containing the same the words ' mixed flour,' and the names of the ingredients composing the same, the name of the maker or packer, and the place where made or packed, in accordance with the provisions of sections thirty-six to forty-five, inclusive, of this Act." " Sect. 45. That whenever any package containing mixed flour is emptied, it shall be the duty of the per- son in whose possession it is to destroy the stamp thereon. Any person disposing of such package with- out first having destroyed the stamp or mark or marks thereon shall, upon conviction, be punished by a fine not exceeding the sum of twenty-five dollars." Compare these provisions with the provisions as to the cancelling of stamps on tobacco (b) and cigars, (c) (a) See supra, p. 31. (6) Supra, p. 27. (c) Supra, p. 22, n. THE WAE EE'S'EXUE LAW OF 1898. 125 '■ Sect. 46. That all fines, penalties, and forfeitures imposed by section thirty-six to section forty-five, both raclusive, of this Act may be recovered in any court of competent jurisdiction," '• Sect. 47. That the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make all needful rules and regulations for carrying into efEect the provisions relating to the manufacture and sale of mixed flour, being section thirty-five to section forty-nine, both inclusive, of this Act. and the said Commissioner of Internal Revenue, by and with the approval of the Secretary of the Treas- ury, for the purpose of carrying said last-mentioned provisions of this Act into efEect, is hereby authorized to employ such additional clerks and agents as may be necessary for that purpose, not to exceed twenty in number." ■ Sect. 48. That any person, firm, or corporation found guilty of a second or any subsequent violation of any of the provisions of section thirty-six to section forty-five, both inclusive, relating to the manufacture and sale of mixed flour as aforesaid, of this Act shall, iu addition to the penalties hei-ein imposed, be impris- oned not less than thirty days nor more than ninety days." " Sect. 49. That the provisions of this Act relating to the manufacture and sale of mixed flour shall take effect and be in force sixty days from and after the date of the passage of this Act ; and all packages of mixed flour found on the premises of any person, firm, or cor- poration on said day, who has made, packed, or re- packed the same, on which the tax herein authorized has not been paid, shall be deemed taxable under the 126 THE WAR REVENUE LAW OF 1898. provisions of section thirty-six to section forty-five, both inclusive, of this Act, and shall be taxed and have affixed thereon such marks, brands, labels, and stamps as required by the provisions of said sections or by the rules and regulations prescribed by the Commissioner of Internal Revenue, under authority of this Act." " Tea. — Sect. 50. That there shall be levied, col- lected, and paid upon tea when imported from foreign countries a duty of ten cents per pound." This section is taken principally from the Act of June 30, 1864, ch. 173, § 1 (13 Stats. 202). "Sect. 51. That this Act shall take effect on the day next succeeding the date of its passage except as otherwise specially provided for." In general a statute takes effect only from the point of time in the day on which it was actually approved, (a) (a) Burgess v. Salmon, 97 U. S. 381. APPENDIX. Internal Revenue Circular No. 495, of June 14, 1898. Belative to the Provisions of the Act of Jane 13, 1898, increasing the Tax on Tobacco, Snuff, Cigars, and Cigarettes, and im- posing Additional Taxes on such Articles. The attention of collectors of internal revenue and other officers is called to section three of the Act of June 13, 1898, entitled "An Act to provide ways and means to meet war expenditures, and for other purposes, ' ' which provides as follows : — TOBACCO, CIGAES, CIGAEETTES, AND SNUTF. Sect. 3. "That there shall, in lieu of the tax now imposed by- law, be levied and collected a tax of twelve cents per pound upon all tobacco and snuff, however prepared, manufactured, and sold, or removed for consumption or sale; and upon cigars and cigarettes which shall be manufactured and sold, or removed for consumption or sale, there shall be levied and collected the following taxes, to be paid by the manufacturer thereof, namely, a tax of three dollars and sixty cents per thousaad on cigars of all descriptions made of tobacco, or any substitute therefor, and weighing more than three pounds per thousand, and of one dollar per thousand on cigars made of tobacco or any substitute therefor, and weighing not more than three pounds per thousand; and a tax of three dollars and sixty cents per thousand on cigarettes made of tobacco or any sub- stitute therefor, and weighing more than three pounds per thou- sand; and one dollar and fifty cents per thousand on cigarettes made of tobacco or any substitute therefor, and weighing not more than three pounds per thousand : Provided, That in lieu of the two, three, and four ounce packages of tobacco and snuff now authorized by law, there may be packages thereof containing one and two- thirds ounces, two and one-half ounces, and three and one-third 128 THE WAR REVENUE LAW OF 1898. ounces, respectively, and in addition to packages now authorized by law, there may be packages containing one ounce of smoking tobacco." "And there shall also be assessed and collected with the excep- tions hereinafter in this section provided for, upon all the articles enumerated in this section which were manufactured, imported, and removed from factory or custom-house before the passage of this Act bearing tax stamps affixed to such articles for the pay- ment of the taxes thereon, and cancelled subsequent to April four- teenth, eighteen hundred and ninety-eight, and which articles were at the time of the passage of this Act held and intended for sale by any person, a tax equal to one-half the difference between the tax already paid on such articles at the time of removal from the factory or custom-house and the tax levied in this Act upon such articles. "Every person having on the day succeeding the date of the passage of this Act any of the above-described articles on hand for sale in excess of one thousand pounds of manufactured tobacco and twenty thousand cigars or cigarettes, and which have been removed from the factory where produced or the custom-house through which imported, bearing the rate of tax payable thereon at the time of such removal, shall make a full and true return under oath in duplicate of the quantity thereof, in pounds as to the tobacco and snuff and in thousands as to the cigars and cigarettes so held on that day, in such form and under such regulations as the Commis- sioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. Such returns shall be made and delivered to the collector or deputy collector for the proper internal revenue district within thirty days after the passage of this Act. One of said returns shall be retained by the collector and the other forwarded to the Commissioner of Internal Revenue, together with the assessment list for the month in which the return is received, and the Commissioner of Internal Revenue shall assess and collect the taxes found to be due, as other taxes not paid by stamps are assessed and collected." The increased rate took effect on the date next succeeding the passage of the Act, that is the first moment of this day, June 14. Under the above provision, two, three, and four ounce packages of tobacco or snuff are not authorized, and manufacturers will be required to discontinue the use of such packages. Dealers having stock on hand, with stamps affixed at old rates subsequent to April 14, 1898, in excess of 1,000 pounds of manu- factured tobacco, and 20,000 cigars or cigarettes, are required to APPENDIX. 129 mate leturn of such excess, to collectors on Form No. 416, within thirty days after passage of the Act, for assessment of tax as above provided. The time for rendering the return expires July 13, 1898. Blanks are being prepared to be furnished to all dealers required to make returns herein prescribed, and will be sent to collectors as soon as possible. Manufacturers will not be allowed to remove from factory tobacco, snuff, cigars, or cigarettes which are not properly stamped under the new law. Proper stamps are being prepared and will be furnished to col- lectors upon requisition. Collectors will be supplied with imprinted stamps denoting the new tax as soon as possible, and until supplied they will imprint the old stamps on hand with rubber stamps as heretofore directed. Any person having possession of unaffixed stamps heretofore issued for the payment of the tax upon tobacco, snuff, cigars, or cigarettes, shall present the same to the collector of the district, who shall receive them at the price paid for such stamps by the purchaser and issue in lieu thereof new or imprinted stamps at the rate provided by said Act. Collectors will immediately notify manufacturers of cigars and tobacco and dealers of the provisions of the law above recited as far as they are affected thereby. Internal Revenue Circular No. 496, of June 14, 1898. Regulations under Act of June 13, 1898, concerning the Additional Tax on Fermented Liquors stored in Warehouse — Instructions as to Brewers' Bonds. The Act approved June 13, 1898, provides for the assessment and collection of the increased tax on all fermented liquors re- moved from the brewery premises prior to the passage of the Act and which, on the day next succeeding its passage, are stored in warehouse, and to which a stamp denoting the tax at the rate of one dollar per barrel had been affixed at time of removal ; and for the purpose of assessing and collecting such tax the law requires return of the quantity of such fermented liquors to be made by the person owning such liquors, and subjects every person who refuses or neglects to make the required return at the time and in the manner provided by law and regulation to an assessment of fifty 9 130 THE AVAR REVENUE LAW OF 1898. per cent in addition to tlio amount of tax due. For making a false or fraudulent return the law imposes a fine not excoeding one thousand dollars, or imprisonment not exeoediug one year, or Imtli, at the diseretion of the eourt, with eosts of proseeution. Under the above provisions, it heeomes the duty of every person, whether owner, or broker, eommission merchant, or other aj;ent for the owner, having stored in warehouse any fermented liquors which have been removed from the brewery where prmluoed ]U'iiir to the passage of the said Aet, bearing the proper stam]> expressing the rate of tax payable thereon at the time of sneli removal, to make and render to the colleetor of the distriet a full and true return, under oath, of the quantity thereof so hold, in whatever packages the same may be contained. For this purpose Fiu'm No. 417 has been providi'd and is lierehy prescribed for use. The return must bo made on said form, and verified by oath, and rendered to the collector or any deputy collec- tor in duplicate upon demand therefor. But if not previimsly ren- dered it must be made to the collector on or before the tenth day of July, 1898. Collectors will proceed at once (in case they have not already done so) to furnish every person in their respective districts ha\ log or supposed to have on storage lii|Uors for which this return must be made (omitting the ordinary supply for imuuvliate use on prem- ises of retail liijuor dealers or retail dealers in malt liquors), two copies of such form, and to require return to lie made tlierecm forth- with in accordance with the "instructions"' |iriuled nu tli(> haclc t1i(M-e(if. Atteuti when the relurn is actually mailc, the quantity returned will be the quantity on hand when the return is made, togi'lher with the quantity renidved iu the interval. Collectors will also require an inventory to be taken at the ear- liest ]iraoticablo date nf the stock of fermented liqutu-s on hand at each place of storage in their respective districts, subject to the increased tax under the provisions of the Act abovi^ referred to. Such inventory is to he nia.de hy a, deputy collector, who will make report of the same, in duplicate, on Form 418, which is lierehy prescribed for that purpose. One copy of the return, Form 417, and one copy of tlu' corre- sponding inventory on Form 4 IS iu each case, will lie forwardi'd to the Commissioner of Internal lie\unue. This return and inventory APPENDIX. 131 are to te used for the determination of the amount of tax due on fermented liquors of the kind above described. Accordingly the amount found due will be entered by the collector on the list, Form 23, which is to be forwarded to the Commissioner of Internal Eevenue on or before the tenth day of July, 1898. The increase in the rate of tax will probably necessitate the giv- ing of new bonds by all brewers, as the law requires the bonds of brewers to be in a sum equal to three times the amount of the tax which, in the opinion of the collector, the brewer will be liable to pay during any one month. New bonds in sufficient amounts must be required in all cases where the present bond is too small to sat- isfy the requirements of the law in this respect. Brewers' bonds given on or after July first must bear a docu- mentary stamp for fifty cents as by the statute provided. Collectors will furnish a copy of this circular to every person interested within their respective districts. United States Internal Revenue (Series 7, No. 24, issued June 23, 1898). Regvlatkms concerning the Exportation, without Payment of Tax, or with Benefit of Drawback of Tux. EXPOKTATION IN BOND. The concluding paragraph of section 22, Act of June 13, 1898, provides — " That articles upon which stamp taxes are required by this Act may, when intended for exportation, be manufactured and sold or removed without having stamps affixed thereto, and without being charged with tax as aforesaid ; and every manufacturer or maker of any article as aforesaid, intended for exportation, shall give such bonds and be subject to such rules and regulations to protect the revenue against fraud as may be from time to time preacribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury." Aeticle I. Where any of the articles above described are to be withdrawn from the place of manufacture, for export, the party intending to export the same will file with the collector of internal revenue a bond in the following form, this bond to be in duplicate, one copy to be retained by the collector and one forwarded to the Commissioner of Internal Revenue : — 132 THE WAR REVENUE LAW OF 1898. FOEM A. Know all men by these presents, that we, , as principal, and and , as sureties, are held and firmly bound to the United States of America in the sum of dollars ; for the payment whereof to the United States we bind ourselves, our heirs, executors, and administrators, jointly and severally, firmly by these presents ; as witness our hands and seals this day of , 189—. The condition of this obligation is such, that whereas, the above bounden principal intends to remove from the place of manufacture, located at , in the district. State of , certain articles enumerated in Schedule B of an Act of Congress, approved June 13, 1898, without payment of the internal revenue tax, for exportation from the United States under the provisions of section 22 of the said Act. Now, therefore, if the said principal shall, as to all such articles so removed from the place of manufacture for exportation, faith- fully and fully comply with all the requirements of said Act of Congress and regulations issued pursuant thereto; and shall fur- nish or cause to be furnished to the collector of internal revenue for said district, and to the Commissioner of Internal Revenue, and within ninety days from the date of each such removal, satisfactory evidence showing that the said articles have been duly entered for export and actually cleared for a port or place without the jurisdic- tion of the United States, or shall, in case the prescribed evidence of clearance is not so furnished, file with the collector aforesaid and within the time above specified other proof satisfactory to that officer and to the Commissioner of Internal Revenue, of the actual exportation of the said articles to a foreign country, then this obli- gation to be void; otherwise, to remain in full force and virtue. . [L. S.] . [L.S.] . [L.S.] Sealed and delivered in the presence of — Art. 2. The penal sum of the foregoing bond must at least equal double the amount of tax on the estimated quantity of articles to be removed for exportation by the principal during a period of three months, and in no case less than $5,000. In case the penalty APPENDIX. 133 of the bond given is found to be insufficient, or in case of death, insolvency, or removal of either of the sureties, or for any other good cause, the collector of the district will require a new and satisfactory bond to be executed, and will forward a copy thereof to the Commissioner of Internal Revenue as in the case of an original bond. An account shall be kept with each bond, either upon the bond or otherwise, in which account the principal will be charged with the tax on each lot removed for exportation in the manner herein- after provided, and will receive credit for the tax on each lot con- cerning which satisfactory proof of exportation is received. REMOVAL OF ARTICLES FROM MANUFACTORY. Art. 3. Upon acceptance of the foregoing bond by the collector, the exporter will be permitted, subject to the following conditions, to remove from the place of manufacture any of the articles above described for export, in such lots and at such times as he may desire : — The goods so removed may be entered at any port of entry in the manner hereinafter provided, and where the manufactory is located at a place remote from a port of entry, the manufacturer may, if he so desires, forward his goods to any such port, to be there held for export for a period not exceeding, however, sixty days, and in quantities not exceeding in value, including the tax, one-half of the penal sum of his export bond. If at the expiration of sixty days the articles so held are not exported, the same should be returned to the manufactory as provided in Art. 12. Art. 4. Before removal of the articles from the place of manu- facture, either for immediate or future exportation, each case con- taining the articles must have marked or branded thereon, in letters and figures of not less than one-half inch in height, the manufacturer's name and district ; the words "For Export," and also a distinctive serial number by which each case may be fully identified. The serial numbers so used will commence with No. 1 for the first case, and will run consecutively so that no two or more cases shall be marked with the same number. To avoid confusion in the matter of numbering the cases, and in specifying the serial numbers on the various returns, the cases should be remo'red from the manufacturer's premises (and so far as practicable exported) in the same order in which they are num- bered. Where the articles are to be held at a port of entry for future shipment, each case so held must contain goods only of the same kind and taxable value, i. e., different articles, or like arti- 134 THE WAR REVENUE LAW OF 1898. cles of a different taxable value, must, under no circumstances, be packed in the same case. Art. 5. The goods wben so removed, must be consigned di- rectly to the collector of customs, and the exporter will procure triplicate bills of lading, two of which he will file with the col- lector of internal revenue of the district from which the removal is made, and one he will forward to the collector of customs, by such conveyance and at such times as will insure its receipt by said collector of customs in advance of the arrival of the goods. The collector of internal revenue will send one of the bills of lading delivered to him to the Commissioner of Internal Revenue with his bonded account. (Art. 13.) The bills of lading must clearly state the name and address of the collector of customs to whom the goods are to be delivered, and must not contain any condition or agreement which will impair the obligation of tlie exporter and transportation company to forward and deliver such goods to the designated collector of customs. Art. 6. Where the goods so received at the port of entry are intended for export at some future date, or if the vessel from any cause be not prepared to receive the same, they will, under such conditions and surveillance, guaranteeing their safe custody, as the collector of customs may require, be deposited in a private warehouse owned by or under control of the principal of the bond, Form A, until the vessel is ready to receive the goods, or, in case the vessel has already sailed, until another vessel is ready to con- vey them to a foreign port ; or if, under such circumstances, the principal of the bond, Form A, should neglect to store the goods as above provided, they shall be stored by the collector of customs at the expense of the principal of said bond. Art. 7. Where articles are removed for export as above pro- vided, the manufacturer will, on the first day of each month, or within five days thereafter, file with the collector of the district in which the manufactory is situated, a monthly statement, in dupli- cate, in the following form, of all articles so removed during the preceding month, the duplicate of which statement will be for- warded by the collector with his Bonded Account (Art. 13) to the Commissioner of Internal Revenue : — FOKM B. United States Internal Revenue. Statement of articles subject to internal revenue tax manufac- tured by , at - , in the collection district APPENDIX. 135 and removed from the place of manufacture during the 189 — , for export in bond, free of tax, under the of month of provisions of section 22 of an Act of Congress, approved June 13, 1898, viz. : — Number of cases. Serial numbers of oases. Spcciflo descrip- tion of articles. Rate of tax. Port of entry. Date of removal. Kind. Number of bottles or pack- ages. Amount of tax. Foreign port. (o) . I, do solemnly swear that the foregoing statement contains a true, full, and accurate description of all articles subject to an internal revenue tax removed from the above-named premises without payment of said tax, during the month specified ; and that the said articles are truly intended to be exported from the United States, as above stated, and that the same will not be sold or dis- posed of for any other purpose whatsoever. [In case of a company or corporation, to be signed by the president or chief officer.] Subscribed and sworn to before me this day of , 189—. [Seal.] ENTRY OF ARTICLES FOR EXPORT. Art. 8. On arrival at the port of export, the goods, unless in- tended for immediate exportation, will be stored under the direc- tion of the collector of customs as provided in Art. 6 ; and, in either case, the exporter, or his duly authorized agent, will, at least six hours prior to the lading of the goods on the foreign bound vessel or car, file with the collector an export entry, in duplicate, and in the following form : — (a) Where any number of cases removed on the same day contain articles of the same kind and quantity, such cases and contents may be reported in aggregate, as, 50 cases Bilious Bitters, one dozen bottles each, etc. 136 THE WAK EEVENUE LAW OF 1898. ToKM C. (Pakt 1.) ExpoH Entry. Entry of articles subject to internal revenue tax received from , of the collection district of the State of , under bond dated , 189 — , for immediate exportation to , on board the , whereof is master or con- ductor, viz. : — Number of cases. Marks and serial numbers. Article. Number of taxable packages. Rate of tax, cents. Amount of tax. Value, 6 I, do solemnly swear that the articles described in the above entry are truly intended to be immediately exported to the port of , and are not intended to be relanded within the limits of the United States. . day of ■ Sworn and subscribed to before me, this — 189—. [Seal.] Collector of Customs, Fort of - Art. 9. In addition to the foregoing entry the exporter will, before the vessel or car upon which the merchandise is laden has departed for the foreign port or port of transshipment, file with the collector of customs with whom such entry is filed a bill of lading covering such merchandise, the validity of which is to be certified to by the collector in his certificate of exportation (Form C, Part 4). In cases of transshipment the exporter will also file with the col- lector at the port of transshipment a like bill of lading condi- tioned for the delivery of the goods at a foreign port, unless a through bill of lading will have been lodged with the collector at the port where the export entry is filed. Where the articles are to be so transshipped the same proceed- ing will be had, as to reinspection and clearance of the article at the port of transshipment, as provided in case of exportation of like articles with benefit of drawback. (See Articles 14 to 35 inclusive.) APPENDIX. 137 Art. 10. Upon receiving the foregoing entry, the collector of customs will indorse on the duplicate thereof an order for examina- tion and shipment, and will deliver the same to the surveyor. The orders will be in the following form : — Form C. (Part 2.) No. . Order for Examination and Shipment. Port of , , 189 — . To THE Surveyor : You will direct the proper officer to exam- ine and ascertain the quantity, marks, and proper description of the merchandise transported by , for shipment on board the as per the annexed entry, and mark with some appropriate device each case thereof, and superintend the lading of the same on board said vessel, car, train, wagon, or wagon train, as the case may be, and make dne return to this office. Collector. To this order the surveyor will append his order to the inspec- tor, viz. : — Inspector will execute the foregoing order. Surveyor. The inspector will examine and superintend the lading of the goods, and will append his report thereof to Porm C, Part 2, in the following form : — PoRM C. (Part 3.) Port of , , 189—. I hereby certify that , described in the within entry, were, on the ■ day of , 189 — , examined by me ; that they were, in my presence, laden on board the , of which is master, bound for , in ; and that they were found to be as described in the within entry, with the following exceptions : Inspector of Customs. The inspector will then return the order, Porm C, Part 2, with his report appended thereto, to the collector of customs. 138 THE WAR REVENUE LAW OF 1898. If there is any deficiency in the quantity or any discrepancy between the goods and their description in the entry, the inspector of customs will note the facts in his report ; and if he has any suspicion of fraud he will at once inform the collector of customs, who will seize the goods and report the case to the United States district attorney. Aet. 11. After the articles have been duly inspected, laden, and cleared, and, in case of transshipment, on receipt of the proper certificate of transshipment and exportation (Art. 9), the collector of customs will issue his certificate in the following form, which certificate, together with the original export entry, Form C, Part 1, will be at once forwarded to the collector of internal revenue of the district from which the articles were received : — Form C. (Pakt 4.) Office or Collector of Customs, Port of , , 18—. I hereby certify that, on the ■ day of 18—, the fol- lowing described merchandise was duly laden on board the , whereof is master, in pursuance of order No. , heretofore issued from this office, and that said merchandise was duly entered on the outward manifest of said vessel, and that said vessel and cargo were cleared from this port (a) on the day of , 18 — , for the port of . Number of caBeB. Marks and serial numbers. Article. Value, S. Number of taxable packages. Rate of tax, cents. Amount of tax. And I do further certify that a proper bill of lading, covering the above named merchandise, has been filed in this office. Witness my hand and official seal this day of , 18 — . [Seal.] To. Collector of - Esq. Collector of Customs. District of - (a) In case of transshipment of the article at another port, the certificate will be here modified to meet the requirements of the case. APPENDIX. 139 If from accident, or other good cause, the foregoing evidence of clearance cannot be furnished by the exporter, application for re- lief may be made in the manner provided in case of exportation of like articles with benefit of drawback. (See Art. 34.) RETURN OF ARTICLES TO MANUFACTORY. Art. 12. Where articles, removed from the place of manufacture and stored at a port of export, are not exported within sixty days from the date of such removal, the same should be immediately returned to the manufactory. In such cases the manufacturer will obtain, and file with the collector of the district from which the removal was made, a bill of lading covering the return of the goods to the manufactory; and if upon inspection, to be made by an officer to be assigned for that purpose, the goods so returned are found to agree with those specified in the manufacturer's state- ment. Form B, the amount of tax due on such articles will be credited on the exporter's bond, Form A. collector's bonded account. Art. 13. Every internal revenue collector from whose district any of the aforementioned articles are removed in bond for export, will render a monthly account of such articles to the Commissioner of Internal Revenue, to be adjusted monthlj', so as to exhibit a true statement of the liability of every such collector on this ac- count ; said account, made on Form C, — 94, will be transmitted, with tlie accompanying vouchers, to the Commissioner of Internal Eevenue on or before the tenth day of the mouth immediately suc- ceeding that for which the account is rendered. The first part of the account will show in detail each lot removed for exportation , by each manufacturer during the month. The second part will show in detail the quantities exported and of taxes paid on deficiencies, which, with the quantity unaccounted for at the end of the month and shown in detail in the third part of the account, will constitute the credit side of the account. Each item of credit on account of exportation must be accompanied by the vouchers, Form C (Parts 1, 2, 3, and 4), and the required Bill of Lading, showing that the articles specified had been duly exported. The third part of the account will exhibit a detailed statement of all articles removed for which no certificates of clearance and expor- tation. Form C, Part 4, have been received. Upon the last page of the account will be exhibited a recapitulation showing the 140 THE WAR REVENUE LAW OF 1898. aggregates of the three detailed statements therein given, as well as the balance unaccounted for, brought forward from the last pre- vious month's report. Collectors will, upon making up this ac- count each month, note the date of each certificate. Form C, Part 5,, and, in case such certificate is overdue, he will promptly notify the exporter and collector of customs of the fact. If the evidence of clearance is not received within thirty days of such notice, the collector will report the matter to the Commissioner of Internal Revenue. Collectors will furnish parties engaging or intending to engage in the business of manufacturing and exporting the aforementioned articles, in their respective districts, with a copy of these regula- tions. None of the forms herein prescribed will be furnished by the Commissioner of Internal Revenue, except the collector's bonded account. EXPOKTATION OF TAX-PAID ARTICLES WITH BENEFIT OP DRAWBACK. Section 26 of the Act approved June 13, 1898, provides — " There shall be an allowance of drawback on articles mentioned in Schedule B of this Act on which any internal-revenue tax shall have been paid, equal in amount to the stamp tax paid thereon, and no more, when exported, to be paid by the warrant of the Secretary of the Treasury on the Treasurer of the United States, out of any money arising from internal taxes not otherwise appro- priated : Provided, That no allowance of drawback shall be made for any such articles exported prior to July first, eighteen hun- dred and ninety-eight. The evidence that any such tax has been paid as aforesaid shall be furnished to the satisfaction of the Com- missioner of Internal Revenue by the person claiming the allow- ance of drawback, and the amount shall be ascertained under such regulations as shall be prescribed from time to time by said Com- missioner, with the approval of the Secretary of the Treasury." Section 3443 of the Revised Statutes of the United States pro- vides that — " Whenever any person fraudulently claims or seeks to obtain an allowance of drawback on goods, wares, or merchandise on which no internal duty shall have been paid, or fraudulently claims any greater allowance of drawback than the tax actually paid as afore- said, he shall forfeit triple the amount wrongfully or fraudulently claimed or sought to be obtained, or the sum of five hundred dol- lars, at the election of the Secretary of the Treasury." APPENDIX. 141 Art. 14. Under the following regulations articles on wliich a drawback of tax is to be claimed may be entered for export by the owner, or by his duly authorized agent (Art. 16), as follows: (a) For Direct Exportation. — In such cases the article may be entered at any outward port for immediate exportation to a foreign port, or at any frontier port when the article is to be exported to adjacent foreign territory. (b) For Transshipment for Export. — In such cases the article may be entered either at an outward port or at an interior port for transshipment to some other port from which the exporting vessel or car is to clear for a foreign country. (c) For Exportation through a Frontier Port in Sealed Cars over Bonded Routes. — In such cases the article may be entered at any port from which such cars clear for export, and, where the locks and seals upon the cars are found intact, no reinspection of the article at the frontier port will be required. Art. 15. To obtain the drawback in either of the foregoing named cases, the exporter, either in person or through a duly authorized agent (Art. 16), must at least six hours prior to ship- ment for export file with the collector of customs at the port from which the shipment is made the following entry in duplicate : — No. PoRM AA. For Internal Revenue Drawhach. Port of 189—. Entry of merchandise upon which internal revenue tax has been paid, intended to be exported by me [or us, as the case may be] to [here name the foreign port], by the way of [here name domestic port if article is to be transshipped for export] by the [here name vessel or car], now lying at . 1 "o '1 1.1 si Value. 1 1 a ft Face value of stamps aflOxed. Name and district of manufacturer. ommiss -, Exporter. 142 THE WAR REVENUE LAW OF 1898. Oath of Exporter. I, , do solemnly, sincerely, and truly swear that the articles described in the foregoing entry, to be laden on board the , are truly intended to be exported as therein stated, and not to be brought back or relanded within the limits of the United States. And I do further swear that the kind, quantity, and value of said merchandise as stated in said entry are correct; that the internal revenue tax thereon, amounting to $ yttttj W ^^^ been paid; that , of , (h) is [or are] justly entitled to a drawback of said tax to the amount stated; and that no previous allowance or drawback has been made or claimed on said merchandise or any part thereof. , Exparter. (c) Subscribed and sworn to before me this day of , 189 — . [Seal. J The foregoing affidavit must, in every case, be executed before a collector of customs or other officer authorized to administer oaths and having a seal. Art. 16. Should the exporter reside in a place other than the one from which said merchandise is exported, the foregoing entry and oath may be executed and signed by an agent, provided such agent has personal knowledge of the facts mentioned therein, on filing with the collector of customs, and also with the collector of internal revenue in charge of exports and drawbacks at the port of exportation, a satisfactory power of attorney, duly executed by said exporter, authorizing the said agent to transact such business in his behalf. When such power of attorney has once been filed, the same will be deemed sufficient to authorize the execution of said forms at any time thereafter until notice of its revocation has been filed with said officers, or until they shall have reason to believe that the exporter has ceased to employ said agent in such capacity. Whenever an affidavit shall be made on behalf of an exporter by his duly authorized agent, or for any business firm by a partner (a) The amount here stated should be the amount, less the commission allowed upon the purchase of the stamps. (h) Here state the full address of the exporter. (c) In case the exporter is a firm, this affidavit will be signed hj a member of the firm cognizant of the facts, and the words " member of firm of " [here insert name of firm] will immediately precede the word "exporter." APPENDIX. 143 thereof, the fact of such authority or partnership must be clearly stated therein. Akt. 17. In addition to the foregoing entry the exporter will, before the vessel or car upon which the merchandise is laden has departed for a foreign port or port of transshipment, file with the collector of customs with whom such entry is filed a bill of lading covering such merchandise, the validity of which is to be certified ■to by the collector in his certificate of exportation (Form E). In cases of transshipment the exporter will also file with the collector at the port of transshipment a like bill of lading conditioned for the delivery of the goods at a foreign port, unless a through bill of lading will have been lodged with the collector at the port where the export entry is filed. Art. 18. Upon the receipt of the entry (Form AA), duly exe- cuted, the collector or his deputy will, in order that the merchan- dise may be duly inspected by an internal revenue ofiicer before being laden on board the exporting vessel, immediately notify the collector of internal revenue in charge of exports that such entry has been filed. The notice will be in the form following : — Poet of , , 189—. SiE : You are hereby notified that an export entry has been filed in this office by , covering certain articles upon which the internal revenue tax is said to have been paid; and that, upon the arrival of an officer, to be designated by you, an order for the lading of such articles will be issued. , Collector of Customs. To , Esq., Collector in Charge of Exports and Drawbacks. Aet. 19. Upon the receipt of the foregoing notice, the collector in charge of exports will immediately detail an ofilcer to accom- pany the customs officer to the place where the merchandise is located, and there make the inspection hereinafter required; and upon the arrival of the internal revenue officer at the custom-house, the collector of customs will deliver to the surveyor the duplicate entry (Form AA), with the following order indorsed thereon: — FoEM BE. Order No. . Poet of , , 189 — . To the Suetteyoe: You will please direct the proper officer to accompany Officer to , and to superintend the lading of the within- 144 THE WAR REVENUE LAW OF 1898. described articles, after the same shall have been duly inspected, and make due return to this office. , Collector of Customs. To this order the surveyor will append the following: — Inspector will execute the foregoing order. , Surveyor. The officer named in the order (Eorm BB) will, with the customs inspector, have joint custody of the duplicate entry until the ex- aminations, comparisons, and reports are made by them, as here- inafter required. The goods offered for shipment should be carefully inspected and identified as those described in the exporter's entry. If upon examination it appears that the cases have been opened or otherwise tampered with, or if the officer has reason to suspect that the cases or contents are not such as are specified in the entry, he will open all such cases and examine the contents thereof, and note on his return of inspection (Form CC) the result of such special inspection, and in what particular the cases appear to be fraudulent or irregular. If evidence of fraud is obtained in any such case, the article so offered for inspection will be seized and the case reported to the United States district attorney for prosecution. Art. 20. The inspector will, even when no suspicion is enter- tained by him respecting the article to be exported, open one or more cases offered for inspection, in order to fully satisfy himself as to the exact contents thereof; and that the stamps affixed to the articles are genuine and of the denomination specified in the ex- porter's entry. In making the examination here ordered, inspectors will exercise great care not to i;njure the cases or the merchantable value of the articles shipped, and they will see that all packages opened by them are securely refastened before the same are laden on board the vessel. To prevent possible damage in such cases, it is suggested that the closing of the packages for final shipment be delayed until the proper examination has been made, or that, in fastening the outer cases, screws be used, so that the inspector may readily and with- out injury to the packages have access to the stamped articles. In case screws are used, the refastening should be with nails, or in such other manner as shall prevent the reopening of the packages without apparent injury. APPENDIX. 145 Akt. 21. After the articles named in the exporter's entry have been duly inspected and laden, the officer detailed by the collector of internal revenue in charge of exports will make his return of inspection in the form following, to be appended to the original entry upon the receipt of that entry by said collector : — FOEM CC. Return of Inspection. Poet of 18—. I hereby certify that, in pursuance of your order of ■ -,18- the following-described merchandise, now laden on board the for exportation to , has been duly examined by me and found to agree with the merchandise described in the export entry filed by with the collector of customs of this port, except as to the following [here note discrepancies, if any. If no dis- crepancies are found, the preceding words " except as to the follow- ing ' ' should be erased] : — ■t-^ H ^ Value. Denomiaa- tion of Face value of stamps. Kama and dis- trict of mauufactuFer. And I further certify that of the merchandise ahove described, the following-described cases^ selected by chance, without sugges- tion from any one, were opened by me at the time of said inspec- tion and found to contain the articles as described in said entry, Marks and numbers. Nxmiber of cases opened. Contents of each case — specific de- scription of. Number and denomi- nation of stamps. Name and district of manufacturer. 146 THE WAR REVENUE LAW OF 1898. Art. 22. After having laden the goods on board the vessel the customs inspector will indorse upon the duplicate entry in his possession the following : — FOEM DD. Return of Lading. Poet of , , 18 — . I hereby certify that, in pursuance of the above order, the fol- lowing-described merchandise has been duly laden on board the . for exportation to : — Marks and numbers. Number of cases. Kind and specific description of merchandise. , Inspector. Aet. 23. After the articles named in the exporter's entry have been duly inspected, laden, and cleared, and in case of transship- ment upon the receipt of the certificate of transshipment (Art. 31), the collector of customs with whom the entry is filed will issue his certificate in the following form: — FoEM EE. Certificate of Exportation under Internal Revenue Acts, Entry No. . Certificate No. Office of Collector of Customs, Port of , , 18 — . I hereby certify that, on the day of , 18 — , the following-described merchandise was duly laden on board the , whereof is master, in pursuance of order No. , heretofore issued from this office, and that said merchan- dise was duly entered on the outward manifest of said vessel, and that said vessel and cargo were cleared from this port (a) on the day of ,18 — , for the port of : — (a) In case of transshipment of the article at another port, the certificate will be here modified to meet the requirements of the case. APPENDIX. 147 And I do further certify that a proper bill of lading, covering the above-named merchandise, has been filed in this office. Witness my hand and official seal this day of , 18—. [Seal. J , Collector of Customs. To , Esq., Collector in Charge of Exports and Drawbacks. Art. 24. In case the articles described in the exporter's entry have been omitted from the outward manifest of the exporter's vessel or car, the exporter may perfect his proof of exportation by filing with the collector of customs with whom the entry is filed proof of landing of the articles in a foreign country satisfactory to that officer, and in the form prescribed in customs regulations for the cancellation of bonds for the exportation of imported merchan- dise. Upon the receipt of such proof the collector will modify his certificate to meet the requirements of the case, and will note on such certificate that satisfactory proof of landing of the articles in a foreign country has been filed in his office. Akt. 25. After the foregoing certificate (Eorm EE) has been issued the sariie will be transmitted to the collector of internal revenue in charge of exports and drawbacks at the port from which the goods are cleared, together with the original export entry (Form AA), and in case of transshipment, the certificate of trans- shipment, Eorm EF (Art. 31), and in case of exportation in sealed cars, the transportation manifest (Art. 32). Art. 26. The collector in charge of exports will immediately examine the proofs submitted, and, if satisfied that the claim made is a valid one, he will indorse his approval thereon, under seal, and, after recording the claim in his office, he will at once trans- mit all the papers in the case to the Commissioner of Internal Eevenue, together with the return of inspection (Form CC) pre- viously filed with him. Art. 27. The evidence will be reviewed by the Commissioner, and if on examination he shall find the same satisfactory, he will award the amount due the claimant. 148 THE WAR REVENUE LAW OF 1898. In calculating this amount, there will be deducted from the face value of the stamps, by which the tax was paid, the largest com- mission on the purchase thereof allowed by law. The amount so awarded will be paid by a warrant on the Treasurer of the United States, and a draft therefor to the order of the party entitled thereto will be sent to the collector of internal revenue in whose district the party resides for delivery. EXPORTATION OF ARTICLES FROM A PORT OF ENTRY THROUGH ANOTHER PORT. Art. 28. When the articles are entered at any port for exportation through another port, the exporter will state in his entry. Form A A, the route or routes over which the articles are to be trans- ported; and in case of shipment of proprietary articles through frontier ports, in sealed cars containing no other merchandise, the exporter thereof may, at the time of entry, apply to the collector at the port where such entry is made to have the cars containing the goods properly locked and sealed, as provided in cases of transpor- tation of imported merchandise, in bond. In case of shipment in sealed cars a transportation manifest must be filed, as in the case of transportation of imported merchandise, and also a through bill of lading covering the merchandise to a foreign port. Art. 29. Upon the receipt of the entry in either of the fore- going cases, and after the merchandise has been duly inspected and laden, the collector will transmit the original of said entry, without delay, to the collector of customs of the port at which the merchandise is to be transshipped, together with a copy of the transportation manifest, in case of shipment in sealed cars. He will also note upon the entry, so transmitted, whether a through bill of lading has been filed in his office. Art. 30. Upon the receipt of such entry the collector at the port of transshipment will direct the proper officer to carefully examine the merchandise upon its arrival, and ascertain that the same agrees in all respects with the entry, and to superintend the lad- ing of the goods on board the vessel or other conveyance by which the same are to be exported, or, in case the merchandise is shipped in sealed cars, to carefully examine the locks, seals, and tags, with which the cars are secured. If the inspector finds that the fasten- ings of the cars have not been tampered with, and that the contents of the cars have not been disturbed, the collector will allow the cars to proceed to their destination without opening the same. If, however, the locks and seals are not found intact, or if the APPENDIX. 149 inspecting ofBcer has any reason to believe that the contents of the cars have been tampered with, the collector will take the merchan- dise into his custody, and report the facts forthwith to the Secre- tary of the Treasury, and also notify the collector at the port of departure. Akt. 31. In case of exportation otherwise than in sealed ears, and if the merchandise inspected is found to agree with that speci- fied in the entry, the collector will, after the goods have been duly laden and cleared, append to the entry his certificate in the follow- ing form : — FOEM FF. Certificate of Transshipment and Exportation. Poet of , ■ — , 18 — . I hereby certify that the within-described merchandise entered at the port of , by , for exportation to , by way of , was brought into this port by , on board the , on the day of , 18 — , and that the same has been carefully inspected and found to be without change or diminution ; except as to the following [here state any discrepancy reported by the inspector] : that said merchandise was duly laden on board the for exportation to ; that said merchandise was duly entered on the outward manifest of said vessel and [unless a through bill of lading has been filed with the collector from whom the export entry was received] a proper bill of lading has been filed in this office ; and that said vessel and cargo were cleared from this port on the day of , 18 — , for the port of . [Seal.] , Collector of Customs. To , Collector of Customs, Port of . Unless a through bill of lading has been filed with the collector forwarding the export entry, the proper bill of lading must be filed with the collector at the port of transshipment. Aet. 32. In case of exportation in sealed cars, and the locks, seals, and tags upon the cars are found intact, the collector will, in lieu of the foregoing certificate, append to the entry, or transpor- tation manifest, and under seal, the following certificate : — 150 THE WAE KEVENUE LAW OF 1898. Poet of , , 18 — . I hereby certify that the within-named car, with contents, ar- rived at this port on the day of , 18 — , in good condi- tion, and that upon examination the same was found to be properly locked and sealed, and that said car, with contents, cleared from this port for the port of on the day of , 18 — , in like good condition and properly locked and sealed. [Seal.] , Collector. Art. 33. After having issued his certificate in either of the foregoing cases, the collector will return the entry, and transpor- tation manifest, if filed, to the collector at the port from which the merchandise was originally shipped. Whereupon the collector of that port will, if the other papers in the case be satisfactory, issue his certificate (Form EE), changed to meet the requirements of the case. SPECIAL CASES NOT OTHEEWISE PROVIDED FOE. Aet. 34. If from any cause the proofs required in the foregoing regulations cannot be furnished, or any of the requirements of the regulations cannot be complied with, application for relief may be made to the Commissioner of Internal Revenue through the col- lector having cognizance of the facts. The application in such cases must be made under oath, and must fully and clearly set forth in what particulars the regulations have not been complied with, and the reasons therefor, and must be accompanied by a cer- tificate of the ofBcer transmitting the same, as to his knowledge of the alleged facts and as to the propriety of granting the relief asked for. The evidence thus submitted will be examined by the Commissioner of Internal Revenue, and if the facts warrant, relief will be granted. Aet. 35. None of the forms herein prescribed will be furnished by the Department except the certificate of exportation, Form EE (Art. 23). Internal Revenue Circular No. 498, of June 27, 1898. Regulations relative to Tax on Chewing Gum or Substitutes tlierefor. The Act entitled "An Act to provide ways and means to meet war expenditures, and for other purposes," approved June 13, 1898, APPENDIX. 151 provides, under Schedule B, on and after July 1, 1898, a tax on chewing gum, or substitutes therefor, as follows : — " For and upon each box, carton, jar, or other package containing chewing gum of not more than one dollar of actual retail value, four cents ; if exceeding one dollar of retail value, for each addi- tional dollar or fractional part thereof, four cents ; under such regulations as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe." On and after that date stamps must be affixed by the maker or manufacturer to packages of chewing gum or substitutes therefor before the same are removed from the factory for consumption or sale. Stamps of the denomination of 4 cents have been provided for the payment of this tax. When packages exceed $1 of retail value the manufacturer shall affix additional stamp or stamps to cover the amount of tax due on such packages. Section 20 of the Act provides, in case of failure to affix the stamp denoting the tax, that the party shall be deemed guilty of a mis- demeanor, and upon conviction thereof shall pay a fine of not more than $500, or be imprisoned not more than six months, or both, at the discretion of the court. Section 22 of the Act also provides that in case of failure to affix the proper stamp as provided, with intent to evade the tax, the maker or manufacturer shall be liable to a fine of not more than $500, or to imprisonment for not more than six months, or both, at the discretion of the court, and the articles unstamped are liable to forfeiture. The manufacturer will, if practicable, so affix the stamp or stamps denoting the proper tax to each box, carton, jar, or package con- taining chewing gum before its sale or removal from the factory or place of manufacture as to effectually seal the package so that on opening the same or using the contents the stamp or stamps will be broken. The manufacturer using or affixing the stamp shall write or stamp thereon the initials of his name, and the date upon which the same shall be attached or used. In default thereof the party making default will be liable to the penalty imposed by section 9 of the Act. Persons desiring to have proprietary stamps furnished from pri- vate dies should apply to the collector of the district, and furnish designs. There shall be affixed to each and every box, carton, jar, or other package containing chewing gum, before its removal from the fac- 152 THE WAR REVENUE LAW OF 1898. tory, a label on which shall be printed in plain legible letters the number of small tablets, 1 cent packages, or other small packages of chewing gum contained therein, and the retail price of each such tablet or small package of gum, in form as follows : — One hundred 1 cent packages, retail value $1.00 Twenty packages, 2 for 5 cents, retail price 50 Sixty packages, 3 for 5 cents, retail price 1.00 I'welve packages, 5 cents each 60 There shall also be affixed to each package a label upon which shall be printed in plain and legible letters the manufacturer's name, with town or city address, and the number of district and the State in which the factory is located, for example: "John Doe, Manufacturer, Philadelphia, First District of Pennsylvania." These labels may be printed on the boxes or cartons if preferred. Samples for salesmen, or for mailing, or for free distribution, shall be taken only from packages which have been duly stamped. The stamps on emptied packages will be destroyed. The law provides that when articles, upon which stamp taxes are required, are to be exported they may be sold or removed with- out having stamps affixed. It also provides for the allowance of drawback of the tax thereon when exported after tax is paid. (See sections 22 and 26, Act of June 13, 1898, and regulations, Series 7, No. 24, issued June 23, 1898.) When chewing gum is to be sold through automatic vending or selling machines, the same is to be kept in the regularly stamped boxes, packages, or containers until placed in the machines, when the stamps shall be destroyed. The chewing gum shall be securely locked in the machine, and shall not be removed therefrom except through the regular aperture controlled by the mechanism. At the end of each and every month the manufacturer or maker of chewing gum or substitutes therefor must make a declaration, as provided in section 23 of said Act, as follows : — "That every manufacturer or maker of any of the articles or com- modities provided for in Schedule B, or his foreman, agent, or superintendent shall at the end of each and every month make, sign, and file with the collector of internal revenue for the district in which he resides a declaration in writing that no such article or commodity has, during such preceding month or time when the last declaration was made, been removed, or carried, or sent, or caused or suffered or known to have been removed, carried, or sent from the premises of such manufacturer or maker other than such as have been duly taken account of and charged with the stamp APPENDIX. 153 tax, on pain of such manufacturer or maker forfeiting for every refusal or neglect to mate such declaration one hundred dollars ; and if any Such manufacturer or maker, or his foreman, agent, or superintendent shall make any false or untrue declaration, such manufacturer or maker, or foreman, agent, or superintendent mak- ing the same shall be deemed guilty of a misdemeanor, and upon conviction shall pay a fine of not more than five hundred dollars, or be imprisoned not more than six months, or both, at the discre- tion of the court." All chewing gum in the hands of manufacturers or wholesale or retail dealers on the first day of July, 1898, is subject to the pay- ment of the stamp tax, but it shall be deemed a compliance with the Act, as to such articles on hand in the hands of wholesale or retail dealers, who are not manufacturers thereof, to afBx the proper adhesive stamp at the time the packages are sold at retail. Internal Revenue Circular No. 500, of July 7, 1898. Concerning the Use of Telegraph. Numerous inquiries having reached this OflSce as to whether or not telegraphic messages dispatched by officers and employees of the Government on official business are required to be stamped under the provision of the Act of June 13, 1898, it is deemed advisable to call attention to the fact that such messages are especially ex- empt from stamp tax by the last proviso of section 18 of the Act referred to. Telegrams of this character should be plainly marked "Official business," and sent "Collect" in all instances when dispatched solely in the personal interest or for the benefit of the party addressed. In this connection attention is particularly called to the fact that the telegraph is to be used at the expense of the Government only upon important public business and in case of urgent neces- sity where the ordinary mail facilities do not furnish sufficient dispatch. All telegrams sent by Internal Eevenue officers or by private parties on their own personal interest must be prepaid, and all telegraphic replies to such telegrams will be sent at the expense of the parties sending the same. 154 THE "WAR REVENUE LAW OF 1898. Internal Revenue Circular No. 502, of July 13, 1898. Regarding the Stamping of Bonds given by Internal Revenue Officers. Attention is called to the fact that the "Act to provide ways and means to meet war expenditures, and for other purposes, ' ' approved June 13, 1898, provides in "Schedule A," as to Bonds, as follows: "For indemnifying any person or persons, firm, or corporation who shall have hecome bound or engaged as surety for the payment of any sum of money, or for the due execution or performance of the duties of any office or position, and to account for money received by virtue thereof, and all other bonds of any description, except such as may he required in legal proceedings, not otherwise provided for in this schedule, fifty cents." Under the terms of the above provisions, all bonds given by officers of internal revenue to the United States for the faitliful discharge of duty, as disbursing agents, for indemnifying the Government or for any other purpose whatsoever must have at- tached thereto a fifty-cent documentary stamp. This stamp will be affixed by the principal, and cancelled by writing, or imprinting, thereon his initials and the date when affixed. The said Act further requires that where the guarantee is by any fidelity, guarantee, or surety company an additional stamp must also be affixed to the bond at the rate of one-half of one cent on each dollar, or fractional part thereof, of the premium charged. A stamp of the denomination of ten cents must also be affixed to the bond, by the terms of the Act, if it bears a certificate of any description required by law, not otherwise specified in the Act. This provision is not held to be applicable to the certificate directed by the Commissioner of Internal Revenue to be made by collectors on the back of bonds as to the sufficiency of the sure- ties, nor, in case of those of gangers, storekeepers, and store- keeper-gangers, that neither of the sureties is a distiller, rectifier, or a wholesale liquor dealer. Collectors of internal revenue will be expected to see that the above requirements as to stamping of bonds are fully observed before the same are transmitted to this office. APPENDIX. 155 Internal Revenue Circular No. 504, of July 20, 1898. Concerning the Payment of Internal Revenue Tax on Premiums charged on Marine, Inland, or Fire Insurance under Open Policies. The paragraph relating to marine, inland, and fire insurance under Schedule A, Act of June 13, 1898, provides — "Insurance (marine, inland, fire): Each policy of insurance or other instrument, by whatever name the same shall be called, by which insurance shall be made or renewed upon property of any description (including rents or profits), whether against peril by sea or on inland waters, or by fire or lightning, or other peril, made by any person, association, or corporation, upon the amount of premium charged, one-half of one cent on each dollar or frac- tional part thereof: Provided, That purely cooperative or mutual fire insurance companies carried on by the members thereof solely for the protection of their own property and not for profit shall be exempted from the tax herein provided." Upon satisfactory representations made to this office that a strict compliance with the foregoing provisions of law, in the matter of affixing the required stamps, is impracticable in cases where insur- ance is effected, or renewed, under "open policies," collectors of internal revenue are authorized, under circular letter of June 30, 1898, to allow certain marine insurance companies who had filed a satisfactory bond, to affix the required stamps to the books of the company on which the amount of premiums under such open policies are charged, to be certified to by the proper officer of the company on the first day of the following month, or within ten days thereafter. To provide for future like cases, collectors are further author- ized, upon satisfactory representations made by any marine, inland, or fire insurance company issuing open policies of insurance, that the premiums charged are not, and cannot be in the ordinary course of business, entered on such policies; and that the same will be duly entered on the books of the company as to each such policy, to allow such companies to affix the required stamps to the books on which such entries are made, as authorized in the cases first referred to. The collector will, however, in all such cases require a satisfac- tory bond in the following form, to be given by the company, or by an approved surety company, and in a penal sum of not less than ten thousand dollars : — 156 THE WAR EEVENUE LAW OF 1898. Know all men by these presents : That the , a corporation of the State of , and having its principal office at , in the State of , is held and firmly bound unto the United States of America, in the full and just sum of dollars, lawful money of the United States, to which payment well and truly to be made the said company binds itself, its successors and assigns, firmly by these presents. Sealed with its corporate seal, and dated this day of , 189—. Whereas the [above bounden (a)] is engaged in the busi- ness of insuring against loss or damage [here state character of risk and class of property on which such risk is assumed], and whereas the premiums charged by the said company under its open policies of insurance are subject to a stamp tax under the provisions of an Act of Congress, approved June 13, 1898; and whereas the premiums so charged, cannot, in the usual and ordinary course of its business, be charged or entered by the said company on the said open policies of insurance ; Now, therefore, the condition of this obligation is such that if the said company shall, as to all premiums charged under the said open policies of insurance, on and after the first day of July, 1898, cause the same to be entered on the premium books of the said company, and shall pay the full amount of tax imposed by the Act of Congress aforesaid on all premiums so charged, and shall affix to the said premium books the required stamps denoting the payment of said tax; and shall, on the first day of each month, or within ten days thereafter, render to the collector of internal rev- enue for the district of , a full and accurate statement of all premiums so charged, and the amount of tax paid thereon as aforesaid, then this obligation to be void; otherwise to remain in full force and virtue. As conditioned in the foregoing bond, the company will, not later than the tenth day of each month, render a statement of the amount of premiums charged during the preceding month, as also the amount of tax thereon paid. The required statement should be made on Form 429, in duplicate, one copy of which will be retained by the collector and one copy forwarded to the Commissioner of Internal Eevenue. (a) Omit, if ^jond is given by a surety company. In anch case the corporate name and principal office of the company on whose behalf the bond is given should be stated in full. APPENDIX. 157 The foregoing regulations will also apply to cases where indi- viduals or firms, acting as agents or brokers, receive or charge pre- miums under open policies of insurance, in addition to the premiums charged by the companies issuing such policies. It is to be espe- cially noted that this provision has no reference to commissions allowed agents out of premiums charged by the companies issuing policies of insurance, as all such premiums must be reported by the companies, in gross, and the tax thereon paid by the companies as required by law. Attention is also especially called to the fact that the foregoing regulations have reference only to open policies of insurance, and not to policies or other instruments under which in- surance is effected, or renewed, where the premiums charged are, or can in the ordinary course of business be, noted thereon. In view of the fact that stamps used in payment of taxes im- posed in the cases here provided for are not identifiable by serial numbers, such taxes, if paid, will not hereafter be reported by col- lectors on their assessment lists ; and so much of circular letter of June 30, 1898, above referred to as is inconsistent herewith is hereby rescinded. Internal Revenue Circular No. 505, of July 23, 1898. Prescribing the Manner in which Dealers in Leaf Tobacco shaU Tceep Book and the Mode of making Abstract of Sales to Manu- facturers of Tobacco and Cigars. Registered dealers in leaf tobacco will be required to close all accounts of their purchases and sales on their book 59 for the six months ended June 30, 1898, and to carry the balance of tobacco on hand at the close of business on that day to a new book for the quarter commencing July 1, 1898, and to transfer the Govern- ment's book for the same time, properly balanced and verified under oath, to the Collector of Internal Revenue of their respec- tive districts, and to quarterly thereafter balance, verify, and return such books to the Collector. Upon receiving the Government's book the collector will at once make an abstract on Form 434, properly verified by him, of all sales of leaf tobacco, refuse scraps, and sweepings of tobacco made to qualified manufacturers of tobacco, snuff, or cigars residing out- side of his district, and all sales made to other persons who are not known to be qualified dealers in tobacco or exporters. All sales made to persons within his district will be carefully 158 THE WAR EEVENUE LAW OF 1898. noted by the collector and compared and checked with the monthly returns made by manufacturers for the same quarter. The verified abstracts forwarded to this office will be transcribed and forwarded to the several districts in which the persons who are shown to have purchased tobacco reside. The collectors receiv- ing these transcripts will note the sales to such persons as reside within their respective districts, and if they are manufacturers, the transcripts will be compared and checked with the monthly returns for the months to which the transcripts refer. A separate abstract on Form 435 will be made by collectors of all sales made to qualified dealers in leaf tobacco and exporters residing outside of their respective districts, and the same will be verified and forwarded to this office, where they will be compared with the original entries on book 69, which should be forwarded not later than the 20th day of the month immediately succeeding the close of the preceding quarter, but the abstract on Forms ISTos. 434 and 435 should be first completed and forwarded to this office, and accounts with manufacturers and dealers within the district should be compared and checked before books 59 are forwarded. These abstracts are now demanded for the purpose of exercising and maintaining a more careful official supervision of the business of manufacturers and of dealers in leaf tobacco. The office antici- pates prompt and efficient co-operation on the part of collectors and other local revenue officers in this work. Collectors having no qualified dealers in leaf tobacco in their districts, or having dealers who have not reported any sales to per- sons residing outside of the districts, will report the facts to this office quarterly. To avoid unnecessary correspondence, care should be taken in giving the date of the purchase, number and kind of packages, and the actual weight of the tobacco purchased, as shown by the record, book 59. The book, Record No. 59, required to be kept by dealers, has been revised and bound in a smaller edition than heretofore, and they will be forwarded to the several collectors who are especially charged that all dealers should be supplied at once, and kept sup- plied in the future, with the necessary number of these books to make complete and full entry therein of all their purchases and sales. The Government will furnish, as heretofore, one book .for original entries, and the manufacturer will furnish the duplicate, as required by section 3360, Revised Statutes. Every person must be regarded as a dealer in leaf tobacco whose business it is, for himself or on commission, to sell, or offer for sale, or consign for sale on commission, leaf tobacco. APPENDIX. 159 Dealers are required to register and keep book, and sliall sell only to other dealers in leaf tobacco and to manufacturers of tobacco, snuff, or cigars, and to such persons as are known to be purchasers of leaf tobacco for export. Internal Revenue Circular No. 506, of July 28, 1898. Examination of Telegrams and Sleeping-car Tickets. To COLLECTOES AND IstTBENAL EeVENUE AgBNTS : Hereafter in making examinations of the files of telegraph com- panies and sleeping-car companies to ascertain if the law has been complied with with reference to stamping telegrams and sleeping- car tickets, you are advised that such examination should be re- stricted to simply ascertaining if the documents referred to have been propely stamped. These instructions are particularly applicable to telegrams where neither the public good nor the safety of the revenues requires that thej' should be delivered to the examining officer. In such cases it is not expected that all the telegrams sent by the company from any one point should be examined. Such examinations will be considered ample if sufficient telegrams of any date called for by the examining officer are passed through the hands of a represent- ative of the company in the presence of the examining officer in such a manner as to enable him to see that they are properly stamped. A knowledge of the contents of the telegrams is not essential to the examining officer. Internal Revenue Circular No. 507, of July 29, 1898. Cancellation of Documentary and Proprietary Internal Revenue Stamps. In any and all cases where an adhesive stamp shall be used for denoting any tax imposed by the Act of June 13, 1898, the person using or affixing the same shall write or stamp thereon, with ink, the initials of his name and the date (year) in which the same shall be attached or used, or shall by cutting and cancelling said stamp with a machine or punch which will affix the initials and date as aforesaid so deface the stamp as to render it unfit for reuse. The cancellation by either method should not so deface the stamp as to prevent its denomination and genuineness from being readily 160 THE WAR REVENUE LAW OF 1898. determined. Stamps imprinted upon the face of checks, drafts, or other similar instruments may he cancelled by dating and signing the check or draft, and filling out the blank lines in writing across the face of the stamp in the usual manner of drawing checks and drafts. Stamps on checks and drafts may also be cancelled by per- forating through said stamp and the paper to which it is attached the amount in figures for which said check or draft is drawn. Where proprietary stamps printed from private dies are used for the payment of tax upon proprietary articles, instead of cancella- tion by initials and date, such stamps shall be so affixed on the box, bottle, or package that in opening the same or using the con- tents thereof the said stamp shall be effectually destroyed. Prescribed by the Commissioner of Internal Revenue under authority conferred by the Act aforesaid. PRACTICAL SUGGESTIONS ADOPTED BY THE BOSTON REAL-ESTATE LAW SOCIETY, COMMONLY KNOWN AS THE ABSTRACT CLUB, AT BOSTON, ON SEPT. 16, 1898. DEEDS. 1. It is recommended that the actual consideration be named. 2. The insertion of a covenant that the consideration named is the actual consideration is not advised. 3. A. statement in the " w testimonium " clause that the grantor has affixed and cancelled the stamps required by law is advised. 4. A stamp is required, as in a lease, {a) upon a separate instru- ment creating an easement in land; 6. g., a grant of a right of way, or a mutual or unilateral party-wall agreement, {h) 5. Where a valuable consideration is paid, stamps should be affixed according to either the expressed consideration or the actual value, whichever is the higher, (c) 6. If it be desired to conceal -the true consideration or value, it may be done by expressing the consideration as ''one dollar and other valuable considerations," and then putting on and cancelling stamps in excess of the requirements of law. 7. Where no actual consideration, or where a nominal considera- tion is paid, — i. e., where the transaction is not really a sale, — no stamps are re.quired. See 9 Int. Rev. Eec. 165; 14 Id. 63. 8. Where a conveyance is made through a third person, i. e., where A conveys to B, who immediately conveys to C, the convey- ance from A to B should be stamped, and that from B to C should not be stamped. If the transaction, however, is a gift and not a sale, neither conveyance should be stamped. The true nature of the transaction should be made clear by recitals of the facts in each deed. Examples : Husband to A, and A to wife. Mortgagee executing power of sale to A, and A to mortgagee. (a) See supra, p. 65. (i) See supra, p. 92, No. 117. (c) See supra, p. 87, No. 50. 11 162 THE WAR REVENUE LAW OF 1898. 9. The acknowledgment of a deed does not require a stamp, (a) 10. The covenants or other statements in a deed are not certifi- cates requiring stamps. "Signed, sealed, and delivered in pres- ence of " requires no stamp. 11. The Register's minute as to record requires no stamp, (b) 12. A conveyance to heirs by an executor, administrator, or trustee, where no actual consideration is paid, requires no stamp. 13. Sheriffs' deeds require stamps, (c) Boutwell (4th ed.), 275, 14. A conveyance by one tenant in common to another or to a stranger, so far as it is a sale, requires stamps according to the value of the interest conveyed. But if the transaction is a parti- tion and not a sale, stamps are not required. If, on a partition, one tenant in common receives more than his share of land, the convey- ance to him should be stamped according to the excess of value of land received above his share. Boutwell (4th ed.), 282, 293, 303; 9 Int. Rev. Rec. 165; 14 Id. 53. 15. A conveyance by one joint tenant to another or to a stranger, if not a gift, is in effect a sale, and requires stamps according to the value of the interest conveyed. 14 Int. Rev. Rec. 53. 16. A deed of confirmation to correct a former deed requires no stamps. It should contain a recital of the facts and the reason for its execution. 14 Int. Rev. Rec. 53. MORTGAGES. 17. Both note and mortgage should be stamped. The note should be stamped like an ordinary promissory note, and the mortgage as a mortgage, (d) 18. The power of sale in a mortgage, whether or not the mort- gagee is in terms named as the attorney of the mortgagor, requires no separate stamp as a power of attorney. 3 Int. Rev. Rec. 44; 4 Id. 171; 6 Id. 130; Boutwell (4th ed.), 229. 19. The covenants, witness clause, acknowledgment, and Regis- ter's entry require no stamps, (e) 20. The mortgage and note must be stamped each for its full face value, irrespective of the value of the land, or of the fact that when the mortgage is given only part of the amount is actually advanced. (/) Bump, 350; McBride v. Doty, 23 Iowa, 122; 9 Int. Rev. Rec. 165; 14 Id. 53. 21. A mortgage for one thousand dollars or less requires no (a) See supra, pp. 86, 90, Nos. 43, 94. (i) See supra, p. 86, No. 43. (c) See supra, p. 92, No. 116. (rl) See supra, p. 82, No. 14. (e) See supra, pp. 86, 90, Nos. 4.3, 94. {/) See supra, p. 92, No. 120. PRACTICAL SUGGESTIONS. 163 stamp, but the accompanying note should be stamped like other notes. 9 Int. Rev. Kec. 165. 22. An assignment of a mortgage should be stamped at the same rate as the original mortgage, but for only the amount still due on the mortgage. If partial payments have been made, it should be so stated, (a) 23. An assignment of a partial interest under a mortgage — e. g., when one of two mortgagees transfers his interest — should be stamped according to the then value of the interest transferred. If partial payments have been made, it should be so stated. Example: An assignment of a mortgage for five thousand dol- lars, on which two thousand dollars has been paid, should be stamped as if it were a mortgage for three thousand dollars ; and an assignment of a half interest in the same should be stamped as if it were a mortgage for fifteen hundred dollars. 24. The transfer of a mortgage note accompanying the assign- ment of a mortgage requires no stamp, (b) 25. An extension of a mortgage should be stamped at the same rate as the original mortgage, but for only the amount still due. If partial payments have been made it should be so stated, (c) 26. An extension of a note accompanying the extension of a mortgage is a renewal of the note, and should be stamped at the same rate as the original note, but for only the amount remaining due. 27. A discharge of a mortgage requires no stamp, (d) 28. A partial release of a mortgage requires no stamp. CERTIEICATES. 29. "Certificates required by law" do not include those certifi- cates which the signer is at liberty to give or not as he pleases, even though the law makes the existence of the certificate a necessary step preliminary to further proceedings (e. ff., the statement to be filed in beginning mechanics' lien proceedings, or the acknowledg- ment of deeds), or provides that the certificate shall be evidence (e. g., a mortgagee's affidavit of sale under a power-of-sale mort- gage), (e) "Certificates required by law" include those certificates which the signer must give when called upon to do so (e. g., where a (o) See supra, pp. 92, 93, Nos. 121, 122. (6) See supra, p. 94, No. 140. (c) See Id., No. 141. (d) But see supra, p. 9.3, Nos. 125, 126. (e) But see supra, p. 91, No. 99. 164 THE WAR REVENUE LAW OF 1898. register of deeds or probate must give a certificate as to matters of record in his charge or certified copies of such records), (a) Consequently the following certificates occurring frequently in practice are exempt from stamps: Acknowledgments of deeds » mort- gages, etc. ; (b) Mortgagor's acknowledgment of entry to fore- close; Certificate of two witnesses to prove entry to foreclose; Affidavit of sale by mortgagee under power-of-sale mortgage ; (c) Statement filed in mechanic's lien proceedings; Jurats before justices of the peace or notaries, (d) CONVEYANCE OF MORTGAGED LAND. 30. A conveyance of land subject to a mortgage is to be stamped as if the land were unencumbered. 31. A conveyance of land where the grantee immediately gives a mortgage back for part of the purchase-money should be stamped as if the full consideration had been paid. 32. A conveyance by a mortgagee under a power in a power-of- sale mortgage, whether it be a first or a subsequent mortgage, is to be stamped like a conveyance of the land unencumbered, (e) MISCELLANEOUS. 33. An executory contract of sale of real estate requires no stamps. 34. Where a lease or other instrument requiring stamps is made in duplicate, — i. e., where there are two originals, — one only requires a stamp. The one not stamped should recite that the other is stamped, (f) 35. An assignment of a policy of insurance is to be stamped at the same rate as the original policy; *. e., the stamp to be in the same proportion to the original stamp as the unexpired portion of the term is to the full term, (jr) Example: A policy for five years with a premium of $100, and bearing a stamp for 50 cents, is assigned at the expiration of three years. The assignment is to be stamped at one-half of one per cent on $40, i. e., 20 cents. This covers both assignments on a conveyance of real estate, and orders making the policy payable in case of loss to mortgagees. (a) See supra, pp. 89, 90, Nos. 79, 91. {b) See supra, pp. 86, 90, Nos. 43, 94. (c) See supra, p. 88, No. 64. {d) See supra, p. 86, No. 45. (e) Nos. 30, 31, and 32 proceed on the theory that the value of the land, irre- spective of the mortgage, is the basis of computing the tax. (/) But see supra, p, 94, No. 136. (x It' [H-n;ilty for fiuliiio to stamp Hi tii_\ on sales of >'''(''. ~i*. "•'• iniblio, exempt . . . '18 niOCLAKATION, of manufacturer uiuior t " bowling: alloy '■ 10 "broker" 7 "cigar" lM "circus" ii, 17 "comnioicial broker " f!, Iti " ooiH'ort hall " 9 "oustoin-lKHiso broker " fi " diroot tax" 10!) '•exhibition'' 0, It^ " gallon " ti " nu-dioiiial preparation " 99, UK) "niixod flour" 11!) " museum " !), 17 " pawubrolvoi- ■' fi, Iti " proprii'lor " , , !) " shows" 9, IS " thoatro" !), 17 " vessel " SI DKNTIFKICE, tax on ()t< Dicrosrr, oertifioato of, tax on . . . .... ... K\ 7 1 , 8 J in savings banks, and withdrawal tliorofrom, not taxed . 7, SL' DIES, penalty for forging, conntorfoifing, etc. . . ... . ;!L' privalo, provisions for . . , ... .;!!■> stamps, etc., provisions poiiooniing, also applicable to Schodnli" U 50 DISCIIAIUIK, of mortgage, when taxed . . ... ..... !);!, l(i;t DISl'ATCII, telegrapliic, tax on 03 DISTRIBUTION, of adhesive stamps ;!i) INDEX. 173 DISTRIBUTIVE SHARES, Pa^e of personal property, tax on 107-130 DOCUMENTS, when exempt from tax 48, 49, 85, 89, 97 marine, certificates of, stamp tax on 60, 62, 71, 90 must be stamped to be evidence or recorded . . 31, 32, 40, 43-45 penalty for issuing, transferring, etc., without stamp ... 40 DRAFTS, penalty for signing without stamp 38 stamp tax on 59, 71, 91 with interest, tax ou 59, 71 DRAWBACK, of stamp tax under Schedule B 103, 104, 131, 140 DRIVING-PARK, not a theatre 13 DROPS, medical, stamp tax on 67 DRUGGISTS, retail, prescriptions to, not taxable 50 DRUGS, ETC., penalty for removing from factory without stamp ... 50, 52 unoompounded, medicinal, when not taxable . .... 50 DUPLICATE INSTRUMENTS, tax on 00,71,74,88,89,94,164 EMPLOYERS' RELIEF ASSOCIATIONS, exempt from tax on life insurance . . 64, 72 ENTRY, of goods, tax on 63, 72 for withdrawal 63, 72, 84 manifest for, tax on 65, 67, 72, 84 for export 135, 136 ERROR, in stamping, effect 46, 47 ESSENCES, tax on 67, 68 , EVIDENCE, document must be stamped to be 30, 31, 46 when may be stamped subsequently 41 EXCHANGE, bill of. (See Bill of Exchange.) of shares, not a conveyance on sale 75 EXCISE TAX, on petroleum and sngar refining 12, 105 how returned 105 174 INDEX. EXECUTOR, Page letters of, not taxed 88 bond of, taxed 85 payment of legacy tax by 107-116 EXEMPTION FROM TAX, marine, inland, and fire insurance 64, 72, 83, 91 of government documents and securities ... 48, 80, 85, 88, 116 of manifests, etc., between the United States and British North America . 67, 83, 84 of certain telephone messages 49 of certain telegraphic messages 49, 153 of co-operative or mutual fire-insurance companies 48, 64, 72, 82, 85 of tax on life insurance in certain cases 63, 64, 72 of physician's prescriptions . . 50 of agricultural products, receipts for 67, 81, 96, 97 of bond under judicial sale .... 88 EXHIBITIONS, tax on 9, 18 EXPORTATION, removal of unstamped articles for 53 drawback 103, 104, 131, 140 bill of lading for, how taxed .' 60,89,134 and transshipment 149 EXPRESS, and freight, tax on 60, 84, 92 company, taxable for consigned goods 78 receipts, tax on 92, 93 money order, tax on 59, 92 EXTRACTS, stamp tax on 68 FARMERS' CO-OPERATIVE SOCIETIES, exempt from life-insurance tax 64, 72 FERMENTED LIQUORS, additional tax on 4, 129 discount on sales of stamps for 4 stored in warehouse, tax on 4 FIDELITY INSURANCE, tax on 64,72,88 FIRE INSURANCE, mutual or co-operative, exemption from tax 64, 72, 82 tax on . . 64, 90, 155 FLOUR, MIXED, provisions relating to 119-126 FOREIGN, articles, method of affixing stamps .... 55 subject to stamp tax 55, 104 INDEX. 175 FOREIGN — continued. Page bill of exchange, stamp tax on 38, 59, 71 securities, liable to stamp tax 46, 74, 75 documents, provisions concerning the stamping of . 38, 46, 59, 71, 74, 75 ■will, tax on 110 FORFEITURE, of unstamped goods 27, 28 how enforced 125 FORGING, dies, stamps, etc., penalty 32, 86 FRATERNAL SOCIETIES, exempt from tax on life insurance 64, 72, 83, 91 FRAUD, not presumed 84, 37, 43, 51, 52 necessary to invalidate instruments 31 in use of stamps or designs 32, 86 FREIGHT RECEIPTS, tax on 60, 84, 92 GENERAL PROVISIONS, levying adhesive stamp tax, Schedules A and B 29 GOODS, entry of , tax on 63, 65, 72, 84 memorandum of sale of, stamp tax on . . 57, 58, 62, 70, 71, 74, 89 receipt for, tax on 60, 71, 85, 93, 97 withdrawal of, tax on 63 GOOD-WILL, subject to tax 74, 75 GRAIN RECEIPTS, tax on 67, 81 GUARANTY, insurance, tax on . 64, 65, 72, 88 for rent, tax on . . . . .... 79 bond, tax on . . 85, 88 GUARDIAN, letters of, not taxed 88 bond of, taxed 85 HAIR, dressing, dye, oil, restorative, tax on 68 HEALTH, certificates, when exempt 89 HIRE, contract for, tax on 65 176 INDEX. IMPORTATION, Page duty on tea ^'^^ tax, on mixed flour .... 1^" ou medicinal articles 55, 104 INCOME, charging legacy tax upon ... • 1"^ INDEMNITY, bonds, tax on . . 61, 64 INDORSEMENT, of note, not subject to stamp duty 38, 94 INHERITANCE, tax on 109 INLAND, bill of exchange, tax on 38, 39, 59, 71, 82 insurance, tax ou .64, 72, 155 INSTRUMENTS, or writings conveying land, etc., tax on . . 62,73,86,92,161 penalty for issuing, transferring, etc., without stamp .... 40 unstamped, not to be recorded and admitted as evidence 31, 32, 40, 43-45 INSURANCE, accident, tax on 64, 72 fidelity, tax on 64, 88 fire, tax on 64, 90, 155 guaranty, tax on 64, 65, 72, 88 inland, tax ou 64, 72, 155 life, tax ou 63, 72, 82 cooperative, exempt 64, 72, 82 marine, tax on ... . 64, 72, 155 ■weekly, tax on 63, 72 premiums, tax on 86, 94, 155 assignment of policy, tax on 66, 93, 94, 164 reinsurance, tax on . . . 94 policy, how stamped, and tax . 86, 93 INTENT, to evade duties 31, 34, 37, 38, 48-45, 51-53 INTEREST, reserved, does not afEect amount of tax . . ... . . 76 94 INTERNAL REVENUE, additional agents authorized 21 Commissioner of, distribution of adhesive stamps by ... . 39 LABEL, on tobacco 27 on cigars 22 on mixed fiour ^oi on chewing gum 2,52 INDEX. 177 LADING, BILL OP, Page stamp tax on 60, 67, 71, 83, 89 LAGER BEER, additional tax on, how collected 4 discount on sale of stamps for 4 stored in warehouse, tax on . . 4 tax on 3 LEAF TOBACCO, special tax on dealers 24, 25, 28, 157 LEASE, existing, of theatre, etc. , who to pay tax 9 stamp tax on 65, 72, 87, 94 assignment of, stamp tax on 66 LECTURES, with stereopticon, a public show 18 LEGACIES, and successions, tax on .... 107-116 LETTER OF CREDIT, stamp tax on . . 59, 71 LETTERS-PATENT, goods sold under, taxable 68, 100 LICENSE, relation to special tax 10, 73 LIFE INSURANCE, fraternal, beneficiary, etc., associations, exempt from tax . 64, 72 tax on policy 63, 72, 82 LINIMENTS, stamp tax on 67 LIQUORS, fermented, additional tax on 4, 129 discount on sales of stamps for 4 LIVE STOCK, sale of, tax on 87, 96 LOAN, associations, exempt from certain taxes 48, 64, 72 one placing, not a broker 15 on real estate, tax on 82, 83 Treasury certificates 116 sale of government bonds 117 LOZENGES, stamp tax on 67 MANIFEST, for entry or clearance of goods, stamp tax on . . . 65, 67, 72, 84 MANUFACTURERS, of articles under Schedule B, declaration required from ... 54 penalty for failing to make declaration 54 12 178 INDEX. MANUFACTURERS — continued. Page evasion of stamp duty by, penalty 51 of cigars, special tax on 19, 24, -88, 127 of tobacco, snuff, or cigars, not to pay tax also as dealer ... 24 special tax on 12, 19, 21, 88, 127 under Schedule B, to fix retail price 102, 103 MARINE, documents, stamp tax on 60, 62, 66, 71, 90 insurance, stamp tax on 64, 72, 155 MARRIAGE, certificate of, when exempt 48, 86, 89, 90 bond, stamp tax on 88 MEDICINAL DRUGS, uncompounded, not taxable 50 preparations, penalty for removing from factory without stamp 50, 52 what are 50, 99, 100-102 proprietary preparations, defined 50 tax on 67 MEDICINES, patent, what are 50, 99-102 penalty for removing from factory without stamp .... 50, 52 sold under prescriptions, not taxable 50 MERCHANDISE, entry of, stamp tax of 63 receipt for, stamp tax on 60 sales of. penalty for failure to affix stamp to 58 tax on, at boards of trade 58, 70, 87, 96, 97 withdrawal of, stamp tax on 63, 72 MESSAGES, telephonic and telegraphic, stamp tax on . . 49, 63, 71, 84, 96, 159 certain, exempt from tax 49, 153 MINERAL WATERS, when taxed 67 MISDEMEANORS, what declared to he . . 25, 30, 34, 35, 37, 38, 40, 50, 52, 54, 58, 59 MIXED FLOUR, provisions relating to 12, 119-126 MONEY ORDER, of the United States, stamp tax on 59, 71, 82 for payment of money, tax on 87, 91, 92 penalty for signing, without stamp 87, 38 MORTGAGE, assignment or transfer of, stamp tax on ... . 66, 92, 93, 163 stamp tax on 65, 72, 82, 83, 87, 92 chattel, tax on 65, 72, 85, 92 release and discharge of, when taxed 93, 94, 163 INDEX. 179 MUNICIPAL BONDS AND DRAFTS, Page exempt from stamp tax 48, 116 MUSEUM, defined 9 proprietor of, special tax on 9, 12, 17 NATIONAL BANKS, returns, etc., of, not taxed 87 NEWSPAPERS, packages of, stamp tax on 60, 71, 93 NOTARY, jurat or certificate of, when taxed 86, 91, 164 certificate to, taxed 90 NOTE, promissory, penalty for signing without stamp 37 stamp tax on 59 NOTICE, on tobacco 27 on cigars 22 on samples 102 on mixed flour 121 on chewing gum 152 OCCUPATION, tax on 10 OILS, stamp tax on 67 OINTMENTS, stamp tax on 67 OLD STAMPS, issued under repealed laws, not valid 88 OLEOMARGARINE, special tax on 12 ORDER, for payment of money, stamp tax on 37, 38, 91, 92 money, United States, stamp tax on 59, 71, 82 telegraphic, for money, stamp tax on 59, 92 PACKAGES, of newspapers, stamp tax on 60,71,93 size of, tobacco and snuff 19, 21 of mixed flour 119, 120, 121 of medicinal preparations, tax on price of 68, 98, 102 forwarded, tax on 83, 84 bulk 101 180 INDEX. PARTNERSHIP, Pago how taxed 11, 18 PASSENGER TIOKETS, stamp tax on 66, 72, 84 PASTES, stamp tax on 67 PATENT MEDICINES, what are taxable 50, 67, 99 PAWNBROKER, defined 8, 16 special tax on 8, 12 PAYMENT, of special tax, how made 28, 29 order for, tax on 37, 38, 91, 92 of legacy tax, before distribution 112 PENALTIES, for delivering articles unstamped 52 for failing to cancel stamps . 27, 35 to ruake declaration by manufacturer under Schedule B . 54 to affix stamps to sales of merchandise 57, 58 to attach adhesive stamps, when may be remitted ... 42 to affix stamp to sales of bonds, debentures, etc 46 for forging, counterfeiting, etc., stamps, dies, etc 32, 36 for issuing, making, signing, etc., documents, etc., without stamp 40 for making, signing, issuing, etc., promissory notes, etc., with- out stamp ... 37 for not attaching stamp to foreign bill of exchange .... 38 for registering, selling, issuing, etc., documents, etc., without stamp . 40 for removing from factory diugs, perfumery, etc. , without stamp 50 for re-using stamped wrappers 51 for re-use of stamps 51 for removing articles unstamped ... 50 for removing or detaching stamps 51 for washing or restoring stamps 33, 34 PENSIONS, exempt from stamp tax . . . 66, 73 PERFUMERY, stamp tax on 50, 68 PETROLATUM, stamp tax on 68. 101 PETROLEUM, companies, excise tax on 12, 105 PHIALS, tax on price of 68, 69 INDEX. 181 PHYSICIANS, Page prescriptions of, not taxable 50 PILLS, stamp tax on 67 PLACE, of business, special tax on each H PLASTERS, stamp tax on 67 PLEDGE, of property, stamp tax on 65, 72, 82, 92 assignment or transfer of, stamp tax on 66 POMADE, stamp tax on 68 PORTER, tax on 3 additional tax on, how collected 4 discount on sale of stamps for . . ... .... 4 stored in warehouse, tax on 4 PORT-WARDEN, certificate of damage, tax on 62, 71 POST-STAMPING, of documents, etc 41 intervening rights not affected by 42 POWDERS, stamp tax on 67 POWER OF ATTORNEY, when exempt ... 66, 162 stamp tax on 66, 79, 87, 93, 95 PREMIUMS, insurance, tax on 86, 94, 155 PREPARATIONS, medicinal, stamp tax on 50, 99-102 penalty for removing from factory without stamp .... 50, 52 proprietary medicinal, what are, and tax on ... 50, 67, 99-102 PRESCRIPTIONS, to retail druggists, not taxable 50 PRESUMPTION, against fraud 31, 34, 43 that instruments were duly stamped 32, 76 that unstamped goods sold were not stamped 53 PRICE, to be fixed by manufacturer or importer 102, 103 PRIVATE DIES AND STAMPS, provisions for ■ 35, 97, 160 PRIVILEGE, tax on > 10 182 INDEX. PROFITS, Page certificates of, stamp tax on 61, 71 PROMISSORY NOTE, penalty for signing without stamp 37 stamp tax on 59, 88, 94 indorsements of, not taxable 38, 94 post-dated checks and drafts are 38 protest of, stamp tax on 66, 73, 91 PROPRIETARY, articles, stamp tax on 50, 67 medicinal preparations, what are 50, 99-102 preparations, defined 50 stamps, private 35, 97, 160 PROPRIETORS, of circuses, concert halls, museums, theatres, and shows, special tax on 9, 12 PROTEST, stamp tax on 66, 73, 91 against tax, form of 13 PROXY, stamp tax on 66, 73, 87, 95 RAILROAD, receipts, stamp tax on 60 telegrams exempt 9 mortgage, how taxed 92 REAL ESTATE, agent for sale of, not a broker 15 conveyance of, tax on 62, 72, 161, 164 leases of, tax on 65, 72, 78, 79 mortgage or pledge of, tax on 65, 162 power of attorney as to, tax on 66, 162 REBATE, on ale, beer, lager beer, porter, and fermented liquors ... 4 RECEIPTS, for goods, stamp tax on 60, 71, 85, 93, 97 for express or freight 59, 60 for money, not taxed 81, 82, 94, 95 warehouse, stamp tax on 67, 81 savings-bank books, not taxed 116 RECIPES, of physicians, not taxable 50 RECORD, of unstamped instruments, effect 40-47 post-stamping, effect 41,42 certificate to copy 42 INDEX. 183 REFINING, P,,3 sugar and petroleum, excise taxes o . . 12, 105 REGISTERING, of documents, etc., without stamp, penalty f or . . . . 40, 46, 47 RELEASE, several, how taxed 79 of mortgage, stamp tax on 93, 94, 163 REMOVING, of manufactured articles before stamping 50 declaration as to 54 cancelling marks 33, 34 stamps, penalty 51 marks on mixed flour 121 residence, effect on legacy tax 110 articles from manufactory 138 RENT, agreement for, stamp tax on 65, 74, 94 receipt for, not taxed 74, 94 RESTORING STAMPS, penalty for 33, 34 RETURNS, of gross receipts of petroleum and sugar-refining companies, how made 105 of tobacco, etc., on hand 20 of property for legacy tax 112 of special tax payers 12, 54 failure to make, or fraud in, remedy 18 SALE, of bonds, etc., tax on ... . 46, 56-58, 70, 71, 73-75, 85, 88, 95 of goods, stamp tax on 62, 70, 74, 89 of stamps 56 biU of, when taxed 58, 85, 87 SALVES, stamp tax on 67 SAMPLES, exempt 102, 104 notice on 102 SAVINGS BANKS, certain, exempt from special tax 7 withdrawal of funds from, exempt 82 receipt-books, not taxed 116 SCHEDULE A 29, 56, 70 SCHEDULE B 29, 50, 51, 67 SEATS, in palace and parlor cars, tax on sale 106 184 INDEX. SHARES, _P»g« certificates of, tax on 46, 70, 82, 87, 95, 96 distributive, tax on ^"7 SHERIFF, bond of, taxed ^8 deed of, taxed 92, 162 SHOWS, defined 9, 18 special tax on 9 SILVER BULLION, coinage of 118 SIRUPS, tax on • 67 SLEEPING CARS AND PARLOR CARS, stamp tax on berths or seats in 106 SNUFF, additional tax on 21, 127 dealers and manufacturers, penalty for failure to pay special taxes 25 manufacturer not required to pay tax also as dealer .... 24 size of packages 19, 21, 26 stock in hand 20 how assessed and collected 20, 26 SOCIETIES, fraternal, beneficiai-y, etc., exempt 64, 72, 83, 91 SPECIAL TAXES. (See Adhesive Stamps and Stamp Tax.) defined 10 banker not required to pay more than one 8 on brokers 7 on commercial brokers 8 on cigar manufacturers 19, 88 on custom-house brokers 8 manufacturers of tobacco, snuff, or cigars, not required to pay . also as dealers 24 on dealers in tobacco 23 on manufacturers of cigars or tobacco, penalty for failure to pay 25 on pawnbrokers 8 on public exhibitions and shows 9 on proprietors of circuses 9 on proprietors of concert halls .... on proprietors of theatres, museums, and concert halls . 9, 17, 18 savings banks exempt from 7 on tobacco dealers, penalty for failure to pay 25 manufacturers 19, 23 SPIRITS, stamp tax on 67 SPOILED STAMPS, reissue of stamps for 6, 30 INDEX. 185 STAMPS, Page affixing to foreign articles 55 dies, etc., provisions concerning, also applicable to Schedule B . 50 how to be cancelled 22, 27, 35, 36, 159, 160 how redeemed . 6, 30 penalty for re-use of . . . . . 32 forging, counterfeiting, etc . 32, 36 required on sales of merchandise at boards of trade 70, 71, 87, 96, 97 preparation of, etc., by Commissioner, etc. . . . . 55 adhesive. (See also Adhesive Stamps and Stamp Tax ) general provisions . . . . ... .29 certain documents exempt from tax . 48, G7, 80, 116 how to be distributed by the Commissioner of Internal Revenue . 39 documents must in general be stamped to be evidence . 31, 32 who to pay tax on ... .97 failure to attach to instrument does not invalidate . . 32 general provisions for levying tax. Schedules A and B . . 29 how such may be subsequently attached . . ... 42 illegal to record instruments not stamped . . 40-47 penalty for failure to cancel . ... 35 issuing, etc., documents . 30, 37 removing articles that are unstamped ... 50 detaching stamps or wrappers ... 33, 51 re-using wrappers that are stamped 22, 27, 51 private, provided for . .... . 35,97,160 penalty for failure to attach . 30 may be remitted .... ... 42 STAMP TAX. " (See Adhesive Stamps and Special Tax ) Schedule A . . . ... ... 29, 56, 70 Schedule B . . 29, 50, 67 on agreement for rent . . .65 on anodynes ... . ... . ... 67 on aromatic cachous . . . .... . . 69 on articles in Schedule B to take effect July 1 , 1 898 . 55 on assignment or transfer of mortgage, etc. ... ... 66 on bank checks 59,71,77,83,91,92 on bay rum . . . . . 101 on bills of lading 60, 07, 71, 83 on bitters . . . . 67, 101 on bonds of indemnity ... ... 61 on casualty insurance ... 64 on certificates . . ... 59, 71, 163 bearing interest 59 on charter party . . 59, 62 on checks .o9, 71, 77, 83, 91, 92 on chewing gum . . 69 on cigars 22 186 INDEX. STAMP TAX — continued. Page on cologne 101 on contract for hire 65 on conveyance 62, 65, 161 on cordials 67 on cosmetics 50, 68 on deed 62, 161 on dentifrice 68 on drafts 59 on drops 67 on essences 67, 68 exemption as to life insurance companies 64 exemptions from, fire, marine, and inland insurance .... 64 on express and freight .... 60 money order 60 on extracts 68 on fidelity insurance . 64 on fire insurance .... 64 foreign articles subject to . . 55, 104 on foreign bill of exchange 58, 59 on guaranty insurance 64 on hair dressing, dye, oil, or restorative 68 on inland insurance . . 64 on instrument or writing conveying land 62, 65 on letter of credit 59 on lease 65 on life insurance 63 on liniments . . 67 on lozenges 67 manifests between the United States and British North America exempt from tax ... 67, 83, 84 on manifest for custom-house entry or clearance .... 63, 85 on marine insurance 64 on medicinal compositions 50, 67 preparations .... 50, 67 proprietary articles and preparations 50 on memorandum of sale of goods 62 on money oider 38, 59 of the United States 59 on mortgage 65, 162 on oils , 67 on ointments 67 on order for payment of money 38, 59 on packages of newspapers 60 on passage tickets 66 on pastes 67 on perfumery and cosmetics 50, 68 on petrolatum 68 101 INDEX. 187 STAMP TAX— continued. Page on pills 68 on plasters 67 on pomade 68 on powders 67 on promissory note 59 on proprietary medicinal articles 50, 67 on protest of notes, etc 66 on receipt for goods, etc 60 on salves 67 on sleeping and parlor cars, berths and seats 106, 159 on snuff 26 on spirits 67 on syrups 67 on telegraphic dispatches 49, 63, 71, 84, 96 on telephone messages 49, 73 on tinctures 67 on tobacco 25 on toilet waters '. 68 on tonics 67 on tooth paste 69 wash 68 on troches 67 on vaseline ~ 68, 101 on warehouse receipts .... .... .... 67 on waters 67 on weekly insurance .... 63 on wines, sparkling or other 70 STATE BONDS AND DRAFTS, exempt from stamp tax 48, 116 STATE COURTS, unstamped documents evidence in 31, 32 STATE TAXES, validity, when Congress also taxes 12 STATUTES, of taxation, how construed 1 STOCK, penalty for failure to affix stamp to certificates of 46 on hand, tax on, how assessed and collected 20 under Schedule B, stamps, how affixed 5.t tax on sales of shares 57, 70, 82, 87, 95, 96 SUCCESSIONS AND LEGACIES, tax on 107-116 SUGAR-REFINING COMPANIES, excise tax on 12, 105 SURETY COMPANY, stamp tax on contracts 65, 88 188 INDEX. TAX, Page additional, on beer, ale, porter, etc., how collected .... 4 statutes levying, how construed 1 excise, on petroleum and sugar refining companies . . . 12, 105 articles enumerated in Schedule B. (See Stamp Tax.) beer, lager beer, ale, porter, and other fermented liquors ... 3 cigars 19 cigarettes 19 legacies and successions 107-116 sales of merchandise at boards of trade, etc. . . 58, 70, 87, 96, 97 of stocks, bonds, debentures, certificates of stock, etc. . 46, 70, 82, 87, 95, 96 snuff 19 stock on hand of cigars 20 of cigarettes 20 ofsnufE 20 how assessed and collected 21 tobacco 19 TEA, import duty on 126 TELEGRAPHIC DISPATCH, stamp tax on 49, 63, 71, 84, 96, 159 messages, certain, exempt from tax 49, 153 order for money, stamp tax on 59, 92 TELEPHONE MESSAGES, certain, exempt fi"om tax 49 messages, stamp tax on 49, 73 returns as to 61, 87 THEATRES, defined 9, 13 proprietors of, special tax on 9, 12, 17 TICKETS, passage, stamp tax on . . 66, 72, 84 for money, when taxed ' . . . . 85, 91 TINCTURES, stamp tax on . . . 67 TOBACCO, additional tax on 19, 127 dealers and manufacturers, penalty for failure to pay special taxes 25 manufacturers, not to pay tax as dealers . . 24 packages, size 19, 21, 27 redeeming stamps for . 6 special taxes on dealers . . 12, 23 special taxes on manufacturers . . ...... 12, 19, 21, 24 returns of, on hand 20 tax on stock in hand 20 INDEX. 189 TOILET WATERS, , ^ ' Page stamp tax on , gg TONICS, tax on giT TOOTH PASTE, tax on go TOOTH WASH, tax on go TRADE-MARK, goods sold under, subject to tax 68, 74 100 101 TREASURY, Secretary of, may secure stamps by contract until July 1, 1899 . 56 certificates, loan ii'j TROCHES, stamp tax on _ g7 TRUST, company, when a banker I4. drafts on, stamp tax on 59 conveyance in, stamp tax on 65, 72, 93, 94 legacy tax ' . 107_116 UNCOMPOUNDED, medicinal drugs or chemicals, when not taxable 50 UNSTAMPED, instruments, illegal to record 40 not evidence 30, 31, 43-47 penalty for issuing 30 37 articles, penalty for removing or delivering ....... 52 removal for exportation 53 VALUE, to be fixed by manufacturer or importer 102, 103 VASELINE, stamp tax on 68, 101 VESSELS, tax on manifest for entry or clearance 65, 67, 72 bill of sale of, not taxed . 85 tickets for passage on, tax 66, 72, 84 WAREHOUSE, beer, ale, porter, etc. , tax on 4 removal from 5 receipts, stamp tax on 67, 73, 81, 96 entry for ... . .... 63 WAREHOUSEMEN, not commercial brokers . . , ... 16 190 INDEX. WASHED STAMPS, p^g^ penalty for using or possessing 33, 34 WATERS, stamp tax ou gy WEEKLY, payment, insurance, stamp tax on 63 72 WILL, legacy tax under 107-116 WINES, sparkling or other, stamp tax on 70 WITHDRAWAL OF GOODS, stamp tax on g3 WRAPPERS, penalty for re-using those that are stamped 51