in the statute to make its provisions retroactively apply is void, retroactive period is concerned it is governed by the preexisting c ment as to apportionment.

But it clearly results that the proposition and the contentions to, would cause one provision of the Constitution to destroy a would result in bringing the provisions of the amendment exe from apportionment into irreconcilable conflict with the general direct taxes be apportioned. Moreover, the tax authorized being direct, would not come under the rule of uniformity appli stitution to other than direct taxes, and thus it would come to p the amendment would be to authorize a particular direct tax apportionment or to the rule of geographical uniformity, thus giv a different tax in one State or States than was levied in another S result instead of simplifying the situation and making clear th taxing power, which obviously the amendment must have been plish, would create radical and destructive changes in our const multiply confusion.

But let us by a demonstration of the error of the fundamental significance of the amendment dispel the confusion necessarily a ments deduced from it. Before coming, however, to the text o the end that its significance may be determined in the light of the and judicial history of the subject with which the amendment is a knowledge of the conditions which presumptively led up to its of the purpose it was intended to accomplish, we make a brief subjects.

That the authority conferred upon Congress by section 8 of A collect taxes, duties, imposts, and excises" is exhaustive and ceivable power of taxation has never been questioned, or, if it h authoritatively declared as to render it necessary only to state t has also never been questioned from the foundation, without s determine under which of the separate headings the power was p that there was authority given, as the part was included in th collect income taxes. Again, it has never, moreover, been ques ceded complete and all-embracing taxing power was subject, respectively applicable, to limitations resulting from the requi section 8, clause 1, that “all duties, imposts, and excises shall be the United States," and to the limitations of Article I, section 2, taxes shall be apportioned among the several States" and of clause 4, that "no capitation or other direct tax shall be laid, un the census or enumeration herein before directed to be taken great subdivisions embracing the complete and perfect delegatio and the two correlated limitations as to such power were th Mr. Chief Justice Fuller in Pollock v. Farmers' Loan & Trust 557: "In the matter of taxation, the Constitution recognizes th

been anywhere made as to the correctness of these prop ning, however, there arose differences of opinion concern in determining in which of the two great subdivisions pausing to state at length the basis of these differences arose from them, as the whole subject was elaborately rev Loan & Trust Co. (157 U. S., 429; 158 U. S., 601), we which is in substance taken from what was said in that were manifested in pressing on the one hand and oppos of an act levying a tax without apportionment on carri persons," and when such a tax was enacted the questi Constitution soon came to this court for determination (3 Dall., 171.) It was held that the tax came within the imposts and therefore did not require apportionment, an agreed to by all the members of the court who took part there was not an exact coincidence in the reasoning by sustained. Without stating the minor differences, it ma accuracy that the divergent reasoning was this: On the not in the class of direct taxes requiring apportionment, directly on property because of its ownership, but rather o an excise, duty, or impost; and on the other, that in an taxes included only taxes directly levied on real estate Putting out of view the difference of reasoning which led to in the Hylton case, it is undoubted that it came to pass in 1 line of demarcation between the two great classes of direct excises, duties, and imposts on the other, which was exe that case, was accepted and acted upon. In the first place that wherever (and there were a number of cases of that kind on real estate or slaves, because of ownership, it was trea direct class and apportionment was provided for, while no as to any other kind of tax is afforded. Again, the situati the various acts taxing incomes derived from property of eve were enacted beginning in 1861 and lasting during what may period. It is not disputable that these latter taxing laws head of excises, duties, and imposts, because it was assume character inasmuch as, although putting a tax burden on including that derived from property, real or personal, they property because of its ownership. And this practical cons to be the accepted one, since it was adopted without dissent the text-writers. (1 Kent Com., 254, 256; 1 Story Const., Lim. (5th ed.), *480; Miller on the Constitution, 237; Pomer sec. 281; Hare Const. Law, vol. 1, 249, 250; Burroughs on Ta Constitutional Legislation, 225.)

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naracter of the two great classificatio one hand, direct taxes subject to apportionment, and on the o and imposts subject to uniformity, held the law to be unconstit for these reasons: Concluding that the classification of direct purpose of rendering it impossible to burden by taxation accum real or personal, except subject to the regulation of apportionme the duty existed to fix what was a direct tax in the constitutional plish this purpose contemplated by the Constitution. (157 U. consider the validity of the tax from this point of view, while n that in common understanding it was direct merely on income a property, it was held that considering the substance of things it w in a constitutional sense to burden an income by a tax was from th to burden the property from which the income was derived and very thing which the provision as to apportionment of direct t prevent. As this conclusion but enforced a regulation as to the power under particular circumstances, it did not in any way dispu taxing authority possessed by Congress, including necessarily t impose income taxes if only they conformed to the constitution were applicable to them. Moreover in addition the conclusion re case did not in any degree involve holding that income taxes ge sarily came within the class of direct taxes on property, but on the the fact that taxation on income was in its nature an excise ent as such unless and until it was concluded that to enforce it wou plishing the result which the requirement as to apportionment of adopted to prevent, in which case the duty would arise to disrega substance alone and hence subject the tax to the regulation as to a otherwise as an excise would not apply to it. Nothing could clearer than to recall that in the Pollock case in so far as the law other classes of property than real estate and invested persona income from "professions, trades, employments, or vocations" validity was recognized; indeed it was expressly declared that upon that subject and attention was called to the fact that taxes o been sustained as excise taxes in the past (ib., p. 635). The w ever, declared unconstitutional on the ground that to permit it to relieve real estate and invested personal property from taxation the burden of the tax to be borne by professions, trades, employ and in that way what was intended as a tax on capital would re a tax on occupations and labor" (ib., p. 637), a result which it have been contemplated by Congress.

This is the text of the amendment:

The Congress shall have power to lay and collect taxes on inco source derived, without apportionment among the several States, to any census or enumeration.

24433°-VOL 18-16--2

by taking into view the burden which resulted on the prop was derived, since in express terms the amendment provi whatever source the income may be derived, shall not be apportionment. From this in substance it indisputably tentions which we have previously noticed concerning be implied from the language of the amendment as to the income taxes which it authorizes find no support in the te conflict with the very purpose which the amendment second, that the contention that the amendment treats & tax although it is relieved from apportionment and is ne ject to the rule of uniformity as such rule only applies to thus destroying the two great classifications which have be from the beginning, is also wholly without foundation amendment that all income taxes shall not be subject t sideration of the sources from which the taxed income n application to such taxes of the rule applied in the Polloc taxes were removed from the great class of excises, duties, rule of uniformity and were placed under the other or unless it can be said that although the Constitution as a express terms excludes the criterion of source of income, for the purpose of destroying the classifications of the excise out of the class to which it belongs and transferrin can not be placed consistently with the requirements of from another point of view, the amendment demonstrates intended and on the contrary shows that it was drawn wit the limitations of the Constitution and harmonizing the because it is to be observed that although from the date of statements made in the opinions in that case it had come taxes in the constitutional sense were confined to taxes let because of its ownership, the amendment contains nothing the ruling in the Pollock case that the word direct had a b embraced also taxes levied directly on personal property and therefore the amendment at least impliedly makes suc of the Constitution-a condition which clearly demonstr not to change the existing interpretation except to the exte the result intended, that is, the prevention of the resort to taxed income was derived in order to cause a direct tax on tax on the source itself and thereby to take an income tax duties, and imposts and place it in the class of direct taxes

We come then to ascertain the merits of the many conter the Constitution as it now stands, that is to say, including sions of the sixteenth amendment as correctly interpreted propositions assailing the validity of the statute on the one

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tions of the Constitution in other respects are concerned, the co since in Stockdale v. Insurance Cos. (20 Wall. 323, 331), in susta prior income tax law which was assailed because of its retroact said:

The right of Congress to have imposed this tax by a new s measure of it was governed by the income of the past year, much less can it be doubted that it could impose such a tax o current year, though part of that year had elapsed when the The joint resolution of July 4, 1864, imposed a tax of 5 per cen the previous year, although one tax on it had already been paid, the validity of the tax or attempted to resist it.

The statute provides that the tax should not apply to enum or corporations, such as labor, agricultural or horticultural or savings banks, etc., and the argument is that as the amendme on incomes "from whatever source derived," by implication it to make these exemptions. But this is only a form of expressin tention as to the meaning of the amendment, which we have And so far as this alleged illegality is based on other provisions the contention is also not open, since it was expressly considere Flint v. Stone Tracy Co. (220 U. S., 108, 173).

Without expressly stating all the other contentions, we su degree adequate to enable us to typify and dispose of all of them

1. The statute levies one tax called a normal tax on all inc up to $20,000 and from that amount up by gradations, a prog tax called an additional tax, is imposed. No tax, however, is 1 of unmarried individuals amounting to $3,000 or less, nor upon persons amounting to $4,000 or less. The progressive tax and the it is said, are based on wealth alone, and the tax is therefore r process clause of the fifth amendment.

2. The act provides for collecting the tax at the source; that i of corporations, etc., to retain and pay the sum of the tax on in and mortgages, unless the owner to whom the interest is payabl he claims an exemption. This duty cast upon corporations, to which they are subjected, is asserted to be repugnant to due taking of their property without compensation, and we recapitu tions as to discrimination against corporations and against indiv provisions of the act dealing with the subject:

(a) Corporations indebted upon coupon and registered bond against, since corporations not so indebted are relieved of any volved in deducting and paying the taxes of individuals on the bonds.

(b) of the class of corporations indebted as above stated, the nates against those which have assumed the payment of taxes o although some or all of their bondholders may be exempt from ta