QjDrttell IGaro ^r^nnl fGibran} Cornell University Library KF6406.A314H61 The War revenue law of 1898. / 3 1924 020 035 386 The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924020035386 THE WAR REVENUE LAW OF I898. ANNOTATED BY EDWARD L. HEYDECKER, OF THE NEW YORK BAR, AUTHOR OF COMMENTARY ON THE MECHANIC LIEN LAW. FULTON McMAHON, OF THE NEW YORK BAR. Al/feNY, N. Y. MATTHEW BENDER, 1898. W57, COPYRIGHT, l8g8, By MATTHEW BENDER. WEED-PARSONS PRINTING COMPANY, PRINTERS AND ELECTROTYPERS, ALBANY, N. Y. INTRODUCTORY. The system of stamp duties originated in Holland in 1624. " In the gallant struggle of the Republic with the overwhelming power of Spain, the States- General had imposed every new tax they could devise ; and, at last, finding their powers of inven- tion exhausted, issued a proclamation offering a reward for the invention of a new and practicable tax. This was gained by the person who invented stamp duties, whose name is unknown." (Dowell's History of Taxation, vol. Ill, p. 322.) The tax was then called " vectigal charts." The first general stamp tax was imposed in Eng- land in 1694 (5 W. & M., c. 21.) The most important additions and changes were made in 1 714 "deed duty;" "The Stamp Act 1765," which pre- cipitated the American Revolution; 1 782, bills and notes; 1 784, " all receipts ; " 1808; General Stamp Act of 1815 (55 Geo. Ill, c. 184); 1824; 1853 (16 & 17 Vict, c. 59 s ); The Stamp Act of 1870; and finally all British Stamp Acts were consoli- dated by ch. 39 of 54 & 55 Victoria, 21 July, 1891. IV INTRODUCTORY. This statute is cited by its short title, The Stamp Act, 1 89 1. The preceding chapter contains The Stamp Duties Management Act. The Succession Duty Act was passed in 1853 (16 & 17 Vict., c. 51), and has been variously amended. The first Act concerning Internal Duties in the United States was passed March 3, 1791 (Stat, vol. I, 199), and affected distilled spirits. The first Stamp legislation was enacted July 6, 1797 (vol. I> 5 2 7)- " An Act to Establish a General Stamp Office" was passed April 23, 1800 (vol. II, 40). This early legislation was inspired by Hamilton and was abolished 1802, under Jefferson, who denounced " infernal " taxes. At a special session of Congress in May, 1813, the first real system of internal revenue was adopted. It taxed sugar refining, carriages, the business of distilling and other forms of production. 'An Act to Abolish Internal Duties " was passed Dec. 23, 1817 (vol. Ill, 401). The Direct Tax Law of 1861 was soon followed by the Revenue Act of July 1, 1862, ch. 119, which became the basis for all our later war revenue legislation. Both it and its principal amendatory successors drew largely upon the earlier American and English acts. The present Internal Revenue department was created by this act, and was promptly organized INTRODUCTORY. V by the first Commissioner, Boutwell, who naively confesses (Introduction to his Manual of the Direct and Excise Tax System) that he did so without making any study, or even examination, of the system long established in England. The Reve- nue Bureau is a part of the Treasury Department, and is under the superintendence of a commis- sioner who is appointed by the President. There is a collector in every district, and there are in- spectors, gaugers, storekeepers and revenue agents. See R. S. U. S. Title xxxv, pp. 60.1-686 of 2d Ed. 1878. The new law makes no material change in the department. Provision is made for the pro- mulgation of rules and regulations touching numerous matters, and official publications (to be had on application) will doubtless soon make these accessible. When the Civil war closed, the federal taxes reached nearly every possible object. Within four years (1862-66) a dozen acts were passed and, as the system was perfected, it was extended until ' internal taxes were again dubbed " infernal." Some one remarked to Senator Collamer that everything was taxed except coffins. He rejoined: " Don't say that to Sherman or he will have them on the tax list before night ! " The number of objects taxed was gradually reduced until spirits and tobacco paid substantially all the internal revenue. VI INTRODUCTORY. The present act is avowedly (see the title) a war revenue bill. It may prove as successful in a Spanish war as was its " Dutch ancestor" (which came with William of Orange to England and to these colonies on the ships that brought the un- welcome "tea" and "paper" to Boston); but its structural origin is as mixed as the descent of the average American. In fact it is patched together from our former acts, and occasionally the parts that were pasted on the same sheet did not fit and were not edited into proper correlation. The most important subsequent acts were of March 3, 1863, ch. 74; March 7, 1864, ch. 20; June 30, 1864, ch. 173, being in fact a new General Act supplanting the act of 1862 without directly repealing it ; Dec. 22, 1864; March 3, 1865, ch. 78 ; March 10, 1866; July 13, 1866, ch. 184, being a new General Act to reduce taxes; March 2, 1867, ch. 169 ; July 20, 1868, ch. 186 ; July 14, 1870, ch. 255, to reduce taxation ; June 6, 1872, ch. 315 ; Dec. 24, 1872, ch. 13. This book has been prepared for lawyers, with- out thought of making it a popular manual. In these early days of the operation of the new law, and in advance of judicial decisions construing it, attention is attracted in an abnormal way to the "rulings" of the Commissioner of Internal Rev- enue and the various Collectors. The " decisions " of these officers as to special taxes, documentary INTRODUCTORY. vii and proprietary stamps, which are being given in great profusion, are merely opinions as to the meaning of the law. The courts may or may not adopt such opinions in civil suits which will arise between citizens. These" decisions "may estop the Government and, in suits by the Government to collect penalties or in criminal prosecutions, if the defendant can show that he has followed a "ruling," an absence of intent to evade the law will doubtless be presumed. As to the part of the government (statutory duties of revenue and legal officers) in enforcing the law, see notes under section 31. While the so-called rulings and opinions under former acts and under the present law have an undoubted value, they distinctly are not entitled to recognition as precedents before the court. See cases cited on this point under section 6. The Internal Revenue Laws are in force wher- ever the jurisdiction of the United States extends. When Oklahoma was temporarily or- ganized as a territory by the act of May 2, 1890, it was determined that they at once became ap- plicable (1890, 19 Opin. Atty.-Gen., 569). Hence they will be in force in Hawaii as soon as our flag is raised there, and they will follow the flag to any other possessions we may acquire. New York, hi Broadway. ij July, 1898. FOR TABLE OF CASES, See page 125. FOR INDEX, See page 137, THE WAR REVENUE LAW of 1898. Approved June 13, 1898. An Act to Provide Ways and Means to Meet War Expendi- tures, and for Other Purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, BEER AND LIQUOR TAX. 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 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 quan- tity or for the fractional parts of a barrel authorized and denned by law. And section thirty-three hundred and thirty-nine of the Revised Statutes is hereby amended accordingly : Provided, That a discount of seven and one- half per centum shall be allowed upon all sales by collect- ors to brewers of the stamps provided for the payment of 2 THE WAR REVENUE LAW. said tax : Provided further, That the additional tax im- posed 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. This section simply increases the tax per barrel from one dollar to two dollars and adds the words " stored in warehouse," so as to make the tax immediately applicable. The increased tax must be paid on goods which are in bond at the time the act takes effect. (1867) Westfall v. Shook, 5 Blatchford, 383. (7th section, Act of Mch. 7, 1864.) Fermented liquors are now covered by the provisions of § 3335 to § 3354. U. S. R. S. Section 3339 defines fractional parts of a barrel for purposes of estimating the tax. SPECIAL TAXES ON OCCUPATION. Sec. 2. That from and after July first, eighteen hun- dred and ninety-eight, special taxes shall be, and hereby are, imposed annually as follows, that is to say : One. Bankers using or employing a capital not exceed- ing the sum of twenty-five thousand dollars shall pay fifty dollars; when using or employing a capital exceeding twenty-five thousand dollars, for every additional thou- sand dollars in excess of twenty-five thousand dollars, two dollars, and in estimating capital surplus shall be in- cluded. 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 com- pany, and ever)? 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 ex- change, or promissory notes, or where stocks, bonds, bul- THE WAR REVENUE LAW. 3 lion, bills of exchange, 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 depos- itors, and which does no other business of banking, shall not be subject to this tax. Two. Brokers shall pay fifty dollars. Every person, firm, or company, whose business it is to negotiate pur- chases 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. Three. Pawnbrokers shall pay twenty dollars. Every person, firm, or company whose business or occupation 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 repay- ment of money loaned thereon, shall be deemed a pawn- broker. Four. Commercial brokers shall pay twenty dollars. 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 ship- pers or consignors or consignees of freight carried by vessels, shall be regarded as a commercial broker under this Act. 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 cus- tom-house papers, or transact business at any port of 4 THE WAR REVENUE LAW. entry relating to the importation or exportation of goods, wares, or merchandise, shall be regarded as a custom- house broker. Six. Proprietors of theaters, museums, and concert halls in cities having more than twenty-five thousand 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 rep- resentations, plays, or performances, for admission to which entrance money is received, not including halls rented or used occasionally for concerts or theatrical rep- resentations, shall be regarded as a theater: 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. 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, Terri- tory, or the District of Columbia, and but one special tax shall be imposed for exhibitions within any one State, Territory, or District. Eight. Proprietors or agents of all other public exhibi- tions 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 Columbia shall not exempt exhibitions from the tax in another State, Territory, or the District of Columbia, and but one spe- cial tax shall be required for exhibitions within any one State, Territory, or the District of Columbia. THE WAR REVENUE LAW. 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 bowl- ing alley or a billiard room, respectively. The scheme, language and rates are taken, with very slight changes, from the Act of June 30, 1864 (chap. 173). This was preceded by the Act of July 1, 1862. The Acts of 1862 and 1864 required a license to be taken out for various occupations (including those men- tioned in section 2) and forbade (§ 71 of Act of June 30, 1864) the carrying on of such occupations until the license fees were paid; the new act here simply imposes special taxes to be paid by those in the occupations specified, and the prohibition against carrying on business before paying the special tax is found in the last paragraph of section 4, which see; and also notes to section 31. The old special taxes were repealed by Act of July 14, 1870. A lawyer who had no license could not recover for his services. (1869) Hall v. Bishop, 3 Daly, 109; but if there be an express contract for a fixed compensation, a broker may recover. (1871) Woodward v. Stearns, 10 Abb. Pr. N. S. 395. (1863) Justice v. Rowand, 10 Phila. 623. This method of taxing occupations or privileges has long been in vogue in many of the States, e. g., Maryland, North Carolina, Penn- sylvania, Alabama, Texas, Tennessee, and others. The courts of these and other States have passed on many questions similar to those likely to arise under this act. See as to yearly license and penalty for violation : (1876) State v. Johnson, 65 Me. 362. Other instances of occupation tax: (1848) Simmons v. State, 12 Mo. 268 (State tax upon lawyers). (1872) St. Louis v. Laughlin, 49 Mo. 559 (city license tax on profes- sions not including lawyers). (1847) Carroll v. Mayor, etc., of Tuscaloosa, 12 Ala. 173 (city license tax on auctioneers). (1857) Gunter &. Leckey, 30 Ala. 591 (State license tax on slave traders). (1856) Portland v. O'Neill, 1 Oreg. 218 (city license tax on brokers). 6 THE WAR REVENUE LAW. (1879) Ex parte City Council, re Knox, 64 Ala. 463 (city tax on lawyers). The words " special tax " were substituted by chap. 184 of 1866 for " license " in the earlier acts of 1862 and 1864. This appears to have been done with a view to disclaim the right of Congress to interfere with the administrative power of the States and to avoid the appear- ance of licensing a business which might conflict with State laws. The " license " was nothing more than a receipt for taxes. See (1866) License Tax Cases, 5 Wall. 462 (Lottery). (1866) Pervear v. Commonwealth, 5 Wall. 475 (Sale of Liquor). (1865) McGuire v. Commonwealth, 3 Wall. 387 (Sale of Liquor). (1865) Commonwealth v. Holbrook, 10 Allen, 200 (Sale of Liquor). (1867) State v. Delano, 54 Me. 501 (Sale of Liquor). (1864) U. S. v. Riley, 5 Blatchf. 204 (Sale of Liquor). (1894) Plumley v. Mass, 155 U. S. 461 (Oleomargarine). Section 81 of ch. 173, Stat. 1864, was amended by ch. 184, Stat. 1866, by the addition of a proviso expressly saying that the payment of a federal special tax shall not authorize the doing within a State of any- thing prohibited by the State laws. And this is essentially the same as § 67 in the first act (Stat. 1862, ch. 119). Special taxes are constitutional. (1866) License Tax Cases, 5 Wall. 462. They must be paid in advance. (1880) U. S. v. Clare, 14 Phila. 543; 2 Fed. R. 55. The special taxes required to be paid prior to the passage of this act related only to liquor, tobacco, oleomargarine and filled cheese. They must be paid in stamps on July rst, by persons who have registered with the Collector before engaging in the business, and the Special Tax Stamp must be displayed at the place of business. R. S., §§ 3232 to 3246; U. S. u. Clare, supra, and see (1867) U. S. u. Shea, 5 Blatch. 546; (1869) U. S. v. 35 Bbls. of Highwines, 2 Biss. 88. A special or business tax should be assessed where the business is carried on, and not at the person's residence if it is elsewhere. (1871) Bates v. Mayor, etc., of Mobile, 46 Ala. 158. And see (1863) Miner v. Fredonia, 27 N. Y. 155. See the last paragraph of section 4 as to payment in advance and penalty. A partnership pays only a single special tax (§ 3234, R. S.), but one payment will not cover several places of business (§ 3235, R. S.). THE WAR REVENUE LAW. 7 Where a firm paid a special tax (brewer's) and was dissolved during the year, the partner who continued the business was not required to pay a new tax. (1889) U. S. v. Davis, 37 Fed. Rep. 468. (1878) U. S. v. Glab, 99 U. S. (9 Otto) 225, aff'g s. c. 1 McCrary (U. S.) 166. (1867) Spielman v. State, 27 Md. 520. Under the Act of June 30, 1864, one professional license did not suffice for a firm. Each member was required to pay. Special No. 4, July 30, 1864. Collection of Circulars 1871, pp. 156, 158. Bankers. Ch. 119 of 1862 (July 1, 1862), sec. 64, subd. 1. Ch. 173 of 1864 (June 30, 1864), sec. 79, subd. 1, amended by ch. 184 of 1866 (July 13, 1866), sec. 9. O. S. R. S., § 3407- A banker, under the definition in this section, (1) Must employ capital; (2) Must have a place of business; (3) Where (a) credits are opened subject to check; or, (b) Money is loaned on securities; or, (c) Stocks, etc., are received for discount or sale. An ordinary bank of deposit or discount comes within (a) (b) and (c); a trust company comes within (b)- t query, does a stock broker, having capital and a place of business, come within (c) ? It would seem so under the following decision: One who has a place of business, indicated by a sign over the door, where his mail matter is received and where he can be met by his clients and where the latter can deliver stocks to be sold by him or under his supervision, and who buys and sells stocks for his custom- ers and who in so doing employs a capital of $30,000, is a banker. (1890) Richmond v. Blake, 132 U. S. 592. Bankers who buy and sell Government securities for themselves are not brokers. (1865) U. S. v. Fisk, 3 Wall. 445. (1866) Clark v. Gilbert, 5 Blatchford, 330. " Having a place of business where deposits are received and paid out on checks, and where money is loaned upon security, is the sub- stance of the business of a banker." (1875) Warren v. Shook, 91 U. S. 704. 8 THE WAR REVENUE LAW. Whether brokers who buy, carry and sell stocks, etc., for customers "on a margin" are bankers, qutzre? (1874) Clark v. Bailey, 12 Blatchford, 156. But securities or money left with such brokers as a pledge for their indemnity, to save them from loss on purchasing or selling stocks for their customers, are not " moneys subject to payment by check or draft," in any just sense of those terms. (1874) Clark v. Bailey, 12 Blatchford, 156, affirmed Bailey v. Clark, 21 Wall. 284. For definition of banker see: (1872) Oulton v. Savings Inst., 17 Wall. 118. A corporation whose business is to invest its capital in real estate bonds and mortgages and negotiate and sell these is not a " banker." (1876) Selden v. Equitable Trust Co., 94 U. S. 419. (1877) Oregon, etc., Trust Co. v. Rathbun, 5 Sawyer, 32. Bank license does not cover pawnbroking. (1879) New Orleans v. Metro. Loan Bk., 31 La. An. 310. " Capital " under the Act of 1864 (subd. 1, § 79), held to mean the capital as fixed by the charter and not to include surplus earnings. (1866) Mechanics', etc., Bk. v, Townsend, 5 Blatchf. 315. The " capital " of a banker does not include money borrowed by him, although used in his business, but means " the property taken from other investments or uses and set apart for and invested in the special business, and in the increase, proceeds and earnings of which property beyond expenditures incurred in its use, consist the profits made in the business." (1874) Bailey v. Clark, 21 Wall. 284. Bank Surplus: (1873) Dollar Sav. Bk. v. U. S., 19 Wall. 227. On question of amount of capital employed. Under the Act of 20 July, 1868, § 49, the revenue officer has power to examine the books of banks and brokers without declaring his pur- pose. (1870) Stanwood 11. Green, 2 Abb. (U. S.) 184. Examination of books under § 14, Act 1864, not unconstitutional infringement of right. (1868) In re Lippmann, 3 Ben. 95. (1871) In re Strouse, 1 Sawyer, 605. THE WAR REVENUE LAW. 9 R. S., § 3163, gives a supervisor the power to examine all persons, books, papers, accounts and premises. This probably does not offend the 4th Amendment to the Constitution so far as it affects distillers and others who voluntarily conduct their business under govern- mental surveillance. (1875) In re Frederick Becker, 21 Int. R. R. 243. (1875) U. S. v. Mason, 6 Biss. 350. (1876) U. S. v. A Distillery, 22 Int. R. R. 195. (1875) U. S. v. Distillery, 6 Biss. 483. (1875) U. S. o. 3 Tons of Coal, 6 Biss. 379. (1869) In re Meador, 1 Abb. C. C. 317. The proceedings upon a refusal to disclose are by order to show cause or by attachment in contempt. R. S., § 3175. (1870) In re Chadwick, 1 Lowell, 439. Inspection of paid checks. (1877) U. S. v. Mann, 95 U. S. 580. Brokers. Ch. 119 of 1862 (July 1, 1862), § 64, subd. 13. Ch. 173 of 1864 (June 30, 1864), § 79, subd. 9, amended by Act of March 3, 1865, and ch. 184 of 1866 (July 13, 1866), § 9. Persons who buy and sell stocks, etc., on their own account are to be deemed brokers. (1874) U. S. v. Cutting, 3 Wall. 441. (1866) Clark v. Gilbert, 5 Blatchf. 330. Bankers who buy and sell government securities for themselves are not brokers. (1874) U. S. v. Fisk, 3 Wall. 445. " The purpose and intent * * * was to make it mean that every man who sold his own stock was a broker and liable to pay $50 for a license." (1874) U. S. v. Fisk, 3 Wall. 445. Bankers who buy and sell securities for others as well as them- selves are brokers, and their sales are subject to tax. 11 Opin. Atty.- Gen. 482. A broker who buys and sells stocks in his own name on a margin for a customer and at the latter's risk, held to be a broker under § 99 of the Act of 30 June, 1864. (1872) Northrup v. Shook, 10 Blatchf. 243. IO THE WAR REVENUE LAW. " Ordinarily, the term ' broker ' is applied to one acting for others; but the part of the definition which speaks of purchases and sales for himself is equally important as that which speaks of sales and pur- chases for others. All parts of the definitions are qualified by the words " whose business it is.' Thus, if A . B. has $10,000 which he desires to invest, and purchases United States stock, or state stock, or any other securities, he does not thereby become a broker. Nor if he owns $10,000 of U. S. stock which he wishes to sell to raise money to pay his debts, or because he is not satisfied with six per cent, in- terest, is he thereby made a broker. It is only when making sales and purchases is his business, his trade, his profession, his means of getting his living or of making his fortune, that he becomes a broker within the meaning of the statute. Nor is it believed that a sale, by one doing a banking business only, of a security received by him for the repayment of a legitimate loan, would make him a broker, and subject to the tax. This would not be deemed an act of brokerage, either under the statute or upon general principles of law. When it is his business the statute properly holds all such acts, whether in the name of himself ostensibly or in the name of others, as the acts of a broker. The danger and the facility for evasion of the statute furnish excellent reasons for the adoption of this provision." (1875) Warren v. Shook, 91 U. S. 704, 710. See (1893) Jackson v. Hough, 38 W. Va. 237. As 10 what constitutes a broker under a state license law see (1885) State v. Duncan, 16 Lea (Tenn.) 75. (1893) Jackson v. Hough, 38 W. Va. 237. Pawnbrokers. Ch. 119 of 1862 (July 1, 1862), § 64, subd. 7. Ch. 173 of 1864 (June 30, 1864), § 79, subd. 10, amended by ch. 184 of 1866 (July 13, 1866), § 9. Bank license does not cover pawnbroking. New Orleans v. Metropolitan Loan Bank, (1879) 31 La. An. 310. A ticket or check given by a pawnbroker under a California law was held to require a stamp under the Act of 1864, § 170. (1870) U. S. v. Smith, 1 Saw. 192. Commercial Brokers. Ch. 119 of 1862 (July I, 1862), § 64, subd. 14. Ch. 173 of 1864 (June 30, 1864), § 79, subd. 14, amended by ch, 184 of 1866 (July 13, 1866), § 9. THE WAR REVENUE LAW. II Act of June 30, 1864, enumerates and defines many classes of brokers. The new act takes in a. few of these, using the same language. Hence, all classes not included in the new act are not taxed. The difference between a factor or commission merchant and a broker is stated by all the books to be this: A factor may buy and sell in his own name, and he has the goods in his possession; while a broker, as such, cannot ordinarily buy or sell in his own name, and has no possession of the goods sold. The plaintiffs made the sales themselves, in their own names, at their own store, on commission, and had possession of the goods as soon as the sales were made, and delivered or shipped them to their customers. This course of business clearly distinguished them as commission merchants as contra- distinguished from brokers or agents. (1874) Slack v. Tucker & Co., 23 Wall. 321 (under Act of 1864), reversing Tucker v. Slack, 1 Holmes, 485. Brokers who acted simply as agents for the purchasers of cotton, and whose principals paid directly for the cotton to the sellers and afterward paid the brokers a percentage for their services, were not commercial brokers within the act, for the act (gth sec. of July 13, 1866), laid a. tax on sales and these brokers did not sell, but bought. " The section of the act referred to provides for taxes in a great variety of sales by bankers, brokers and others, of stocks, real estate, etc., but it is always a tax, on sales, and always collected of the seller, or his broker or agent." (1872) Stockdale, Collector, v. Dos well, 16 Wall. 156. A farmer who occasionally and incidentally buys cattle is not a cattle broker. (1867) U. S. v. Kenton, 2 Bond, 97. A market gardener, selling his products from his wagon in the city on market days is a " produce broker " under § 79 of the Act of 1866. (1870) U. S. v. Simons, 1 Abb. 470; 7 Phila. 607. As to who are " brokers " and how the question is to be decided, see: (1873) Blackford v. State, 8 Heisk. (Tenn.) 538. (1872) State v. Field, 49 Mo. 270. (1884) Braun v. Chicago, no 111. 186. A tax on the occupation of " real estate broker" is constitutional. (1873) Wiltse v. State, 8 Heisk. (Tenn.) 544. 12 THE WAR REVENUE LAW. Custom House Brokers. Ch. 173 of 1864 (June 30), § 79, subd. 15. Ch. 184 of 1866 (July 13), § 9. Proprietors of Theaters, etc. Ch. 119 of 1862 (July 1), § 64, subd. 17. Ch. 173 of 1864 (June 30), § 79, subd. 37. Ch. 184 of 1866 (July 13), § 9. A " proprietor " of a still under the revenue law means the person who has exclusive control, e. g., the lessee, not the lessor. (1878) U. S. v. Van Slyke, 8 Biss. 227. See U. S. R. S., § 3251. Circuses and Public Exhibitions. Ch. 119 of 1862 (July 1), § 64, subd. 18. Ch. 173 of 1864 (June 30), § 79, subd. 38. Ch. 184 of 1866 (July 13), § 9. Bowling Alleys and Billiard Rooms. Ch. 119 of 1862 (July 1, 1862), § 64, subd. 20. Ch. 173 of 1864 (June 30, 1864), § 79, subd. 40, amended by ch. 184 of 1866 (July 13, 1866), § 9. " Any person who appears to be, or for the time being is, in the possession and control of a place or building where a billiard table is kept for public use, is prima facie the proprietor of a billiard-room and liable to pay this special tax." (1871) U. S. v. Howard, 1 Sawyer, 507. Billiard license good from delivery, not from date. (1878) State v. Pate, 67 Mo. 488. Bagatelle tables, called pigeon-holes, are not billiard tables. 9 I. R. R. 30. TOBACCO, CIGARS, CIGARETTES, AND SNUFF. Sec. 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 manu- factured and sold, or removed for consumption or sale, THE WAR REVENUE LAW. 1 3 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 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 substitute therefor, and weighing more than three pounds per thousand ; 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-third ounces, two and one-half ounces, and three and one-third 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 exceptions 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 payment of the taxes thereon, and canceled 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 cus- tom-house and the tax levied in this Act upon such articles. 14 THE WAR REVENUE LAW. Every person having on the day succeeding the date of the passage of this Act any of the above-described arti- cles 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 fac- tory 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 Commissioner of Inter- nal 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 re- tained 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. And for the expense connected with the assessment and collection of the taxes provided by this Act there is hereby appropriated the sum of one hundred thousand 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 collectors 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 Com- missioner of Internal Revenue, be necessary for a period not exceeding one year, to be compensated for their serv- THE WAR REVENUE LAW. 1 5 ices by such allowances as shall be made by the Secretary of the Treasury, upon the recommendation of the Com- missioner of Internal 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 Statutes as amended, and the existing provisions of law in all other respects shall apply to the duties, compensation; and expenses of such agents. Tobacco has continued since 1862 to be taxed for revenue, and the general provisions covering it are to be found in R. S., §§ 3355 to 3406, and amendments. As to former rates on tobacco and snuff, see R. S., § 3368, amended Oct. 1, 1890 (26 Stat. L. 567, § 30), and as to cigars, § 3394, amended March 3, 1883 (22 Stat. L. 488), July 24, 1897 (ch. II; § 10). § 3362, R. S., amended March 1, 1879, cn - I2 5. § J 4> prescribes the manner in which tobacco and snuff shall be put up. As to tobacco on hand when the increased tax takes effect (§ 173 of Act of July 1, 1864), see: (T877) Gale & Ax v. Sauerwein, I Hughes, 332, which held that tobacco on which tax had been paid at lower rate was not taxable again at higher rate after act took effect. An increased tax was collected upon tobacco that was sold and re- moved on the morning of the day during the afternoon of which the President approved the law providing for the increase. This was held to be ex post facto and recovery was had of the tax so paid under protest. (1878) Burgess v. Salmon, 7 Otto, 381, affirming Salmon v. Burgess, 1 Hughes, 356. As to effect of a change in the law upon tobacco in warehouse : ( 18 79) Jones v. Black well, 10 Otto, 599; and see I. R. Tax on Tobacco, 14 Opin. Atty.-Gen. no (Aug. 27, 1872). Last paragraph. Sections 3140-3171, being ch. 1 of tit. xxxv. U. S. R. S., concern officers of Internal Revenue. Section 3152 was amended by 20 Stat. 178 and 329. 1 6 THE WAR REVENUE LAW. The change in the size of packages was made to enable the dealers to maintain the present price of a popular sized package by slightly reducing the size. It is practically an adjustment of the increased tax to the demands of the 5 and io-cent trade. See Cong. Rec, p. 6021, June 1, 1898. § 3362, U. S. R. S., prescribes the manner in which tobacco and snuff shall be put up and provides certain exceptions as to sales in bulk and for export. As to the general organization of the Revenue Department, see R. S. title xxxv. SPECIAL TAXES ON TOBACCO DEALERS AND MANUFAC- TURERS. Sec. 4. That from and after July first, eighteen hun- dred and ninety-eight, special taxes on tobacco dealers and manufacturers shall be and hereby are imposed annu- ally, as follows, the amount of such annual taxes to be computed in all cases on the basis of the annual sales for the preceding fiscal year : Dealers in leaf tobacco whose annual sales do not ex- ceed 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 re- garded as a dealer in tobacco : Provided, That no manu- facturer 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 manu- facture. THE WAR REVENUE LAW. 1 7 Manufacturers of tobacco whose annual sales do not exceed fifty thousand pounds shall each pa)' six dollars. Manufacturers of tobacco whose annual sales exceed fifty thousand and do not exceed one hundred thousand pounds shall each pay twelve dollars. Manufacturers of tobacco whose annual sales exceed 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 one hundred thousand and do not exceed two hundred thou- sand 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 occu- pation for which special taxes are imposed by this Act, without having paid the special tax herein provided, 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 not more than five hundred dol- lars, or be imprisoned not more than six months, or both, at the discretion of the court. This section revives special taxes which were repealed by Act of Oct. i, 1890 (§ 26). See R. S. (1878), § 3244; as to dealers in leaf tobacco (subd. 6 and 7); as to dealers in tobacco (subd. 8); as to manu- facturers of tobacco (subd. 9); as to manufacturers of cigars (subd. 10). Dealers in leaf tobacco were formerly (Act of 1872) classified as wholesale and retail. The minimum sales feature of the tax on deal- ers in tobacco is new, although there was a classification prior to 1872. The last tax embraced all such dealers. The classification of manu- facturers according to annual sales is also new. 2 1 8 THE WAR REVENUE LAW. On April 29, 1898, Mr. McMillin asked Mr. Dingley whether the tax on dealers in tobacco would interfere with the sales of farmers and producers. Mr. Dingley said no, and that both the Committee and the Commissioner of Internal Revenue had so agreed. Cong. Rec. 4851. Employers who for accommodation and without profit deal out lanufactured tobacco to their employees are dealers liable to the special tax. (1881) U. S. v. Vinson, 8 Fed. R. 507. The last paragraph of this section is one of several instances in the act of dislocated provisions. It manifestly applies to all the occupa- tions specified in the nine paragraphs of section 3, and to section 36, as well as to section 4. By the Act of 1862, a person who carried on a taxable trade with- out a license forfeited three times the tax (§ 59). This was changed in 1863 (ch. 74, § 24) to imprisonment not exceeding two years for knowingly offending. By ch. 173, § 73, Statute 1864, the penalty was liability to the tax, imprisonment up to two years, or a $500 fine, or both. In 1866 (ch. 184) the penalty remained unchanged when the " license " became a " special tax." In 1867 (ch. 169) the offender is made liable to the payment of the tax and to a fine of not less than $10 nor more than $500, except tobacco and liquor-dealers, who may be imprisoned from sixty days to two years. By ch. 255 of 1870 (July 14), special taxes were repealed after May 1, 1871, with certain exceptions as to liquor and tobacco. The last clause of this section now revives the prohibition and severe penalties, somewhat modified. For definition of " carrying on the business " of liquor selling, see (1886) U. S. v. Rennecke, 28 Fed. Rep. 847. USE OF OLD KATE STAMPS. Sec. 5. Until appropriate stamps are prepared and fur- nished, the stamps heretofore used to denote the pay- ment of the internal revenue tax on fermented liquors, tobacco, snuff, cigars and cigarettes may be stamped or imprinted with a suitable device to denote the new Fate of tax, and shall be affixed to all packages containing such articles on which the tax imposed by this Act is THE WAR REVENUE LAW. 1 9 paid. And any person having possession of unaffixed stamps heretofore issued for the payment of the tax upon fermented liquors, 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 purchasers and issue in lieu thereof new or imprinted stamps at the rate provided by this Act. See § 25. To meet the great initial demand, the department obtained a trans- fer of unissued postage-stamps and issued them as revenue stamps imprinted " I. R." STAMPS ON DOCUMENTS, MEDICINES, ETC. (Schedules A and B). Sec. 6. That on and after the first day of July, eighteen hundred and ninety-eight, there shall be levied, collected, and paid, for and in respect of the several bonds, deben- tures, or certificates of stock and of indebtedness, and other documents, instruments, matters, and things men- tioned 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 speci- fied or set forth in the said schedule. And there shall also be levied, collected, and paid, for and in respect to the medicines, preparations, matters, 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. 20 THE WAR REVENUE LAW. Act of 1862 (July 1), § 94. Act of 1864 (June 30), § 151. Stamp legislation is altogether positivi juris, involving nothing of principle or of reason. (1834) Morley v. Hall, 2 Dowl. 494. Generally, penal and revenue acts are to be construed strictly, with a liberal interpretation upon words of exception. (1827) U. S. v. Gooding, 12 Wheat. 460. (1807) Warrington v. Furbor, 8 East, 242. But where there is any doubt, the government has the burden of proof. (1855) Gurrz/. Scudds, 11 Exch. R. 190. (1828) Doe v. Amos, 2 M. & R. 180. Stamp laws are directly penal and in restraint of common right, and are to be construed strictly. (1865) Hugus v. Strickler, Ig Iowa, 413. (1864) Celley v. Gray, 37 Vt. 136. (1868) Poyd v. Hood, 57 Pa. St. 98. (1867) Vail v. Knapp, 49 Barb. 299. (1869) N. H. etc. Co. v. Quintard, 31 How. Pr. 29. Contra : Revenue statutes which impose forfeitures are not penal but remedial and to be liberally construed. (1870) U. S. v. Hodson, 10 Wall. 395. (1868) U. S. v. OIney, 1 Abb. 275. (1845) Taylor v. U. S., 3 How. 197. (1874) Smythe v. Fiske, 23 Wall. 374. The power of Congress to enact revenue laws is founded on § 8, art. 1 of Constitution. See (1866) Baird v. Pridmore, 31 How. Pr. 359. " A slight examination of the act and of the schedules forming a part of it shows very clearly that the subjects of taxation are written instruments in general use, whose character and objects are well understood and which have a definite meaning."' (1863) Jackson v. Allen, 26 How. Pr. 119 (referring to Act of 1862). Two instruments constituting in fact one contract require only one stamp. (1871) Bowker v. Goodwin, 7 Nev. 135. As to the distinction between an informal letter and a formal instru- ment requiring a stamp, see: THE WAR REVENUE LAW. 21 (1868) Boyd v. Hood, 57 Pa. St. 98. (1866) Crocker v. Foley, 13 Allen (Mass.) 376. A letter promising marriage does not require a stamp, the value not being measurable. (1818) Orford v. Cole, 2 Starkie, 351. And see Mercer v. Mercer, 29 Iowa 557. A joint and several agreement by several persons to pay the sums therein agreed requires only one stamp. (1867) Ballard v. Burnside, 49 Barb. 102. See (1811) Davis v, Williams, 13 East, 232, and note. " The construction given to the statute by the proper executive- officers should be regarded, and though not having the force of a judicial construction, is entitled to much weight, if for no other reason that there may be no conflict in the two departments of the government in applying and executing the law." (1865) Hugus v. Strickler, 19 Iowa, 413 See also (1865) Smith v. Waters, 25 Ind. 397. (1896) In re Merchandise Imported by Hoyt, 75 Fed. Rep. 998. (1867) Cardinel v. Smith, Deady (U. S.) 197, 204, where the court comments on the readiness of the Commissioner to rule both ways, and says that, being called upon to determine what the law actually is, it can give but little weight to such rulings. The present Act is in many respects a re-enactment of former laws which had been officially construed by the revenue officers, but such re-enactment does not have the effect of adopting the constructions thus given. See (1873) Dollar Sav. Bk. v. U. S., 19 Wall. 227, 9 Alb. L. J. 302. English judges have alluded to long-continued usages of the stamp office as a practical commentary on the law, although not conclusive as to interpretation. See Edwards on Stamp Act, p. 9. Tilsley on Stamp Laws, p. 10. It is wholly immaterial who affixed the stamps. (1868) Adams v. Dale 29 Ind. 273, 9 I. R. R. 163. See Cancellation; notes to section 9. The actual time of making, and not the apparent date of, an instru- ment determines its validity when unstamped. (1866) Willey v. Robinson, 13 Allen (Mass.) 128. 22 THE WAR REVENUE LAW. Obligations executed prior to date fixed in Act of 1862 needed no stamp to make them admissible in evidence. (1867) Bayly v. McKnight, 19 La. An. 321. (1866) Contra, McLearn v. Skelton, 18 La. An. 514. The decision of a State Court as to the amount of the tax to be affixed in stamps is not subject to review in the U. S. Supreme Court. (1866) Campau v. Lewis, 3 Wall. 106. It is no defense to the collection of a. judgment that it was obtained on a note which was not duly stamped. (1870) Mogelin v. Westhoff, 33 Tex. 788. New matter written upon an old (stamped) instrument requires a new stamp. (1827) Reed v. Deere, 7 Barn. & C. 261. (1809) Knill v. Williams, 10 East, 431. (1812) Bathe v. Taylor, 15 East, 412. And many other cases so holding, where the alteration or addition created an essentially new instrument. But minor changes and cor- rections do not so operate and the question of materiality is for the court. (1801) Kershaw v. Cox, 3 Esp. N. P. C. 246 (frequently followed); (1828) Steele ■v. Spencer, I Peters, 552. The burden of accounting for a material alteration is upon the per- son claiming under the instrument. (1847) Waring v. Smyth, 2 Barb. Ch. 119; (1839) Herrick v. Malin, 22 Wend. 388. Where, under the common law, an oral promise or acknowledgment was binding, and a later statute has required it to be in writing (e. g., to take a case out of the statute of limitations, to confirm an infant's promise, etc.), the English statutes provided that such instruments shall not require revenue stamps. See 9 Geo. IV., c. 14. FAILURE TO STAMP DOCUMENTS. Sec. 7. That if any person or persons shall make, sign, or issue, or cause to be made, signed, cr issued, any in- strument, document, or paper of any kind or description whatsoever, without the same being duly stamped for denoting the tax hereby imposed thereon, or without THE WAR REVENUE LAW. 23 having thereupon an adhesive stamp to denote said tax, such person or persons shall be deemed guilty of a misde- meanor, 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 competent evidence in any court. 1862 (July 1), §95; U. S. R. S., § 3422. Not in Act of 1864, June 30, in this form. Compare § 10, which is taken from Acts of 1862 and 1864. The former acts attempted to inflict penalties and forfeitures for failure to conform to the act, in addition to making the instrument inadmissible in evidence. The new act has done away with the for- feitures and has substituted a system by which the forbidden acts are made misdemeanors. MISDEMEANORS. Thus, Section 7 makes the making, signing or issuing of documents, etc. (no question of intent involved), a misdemeanor with a fine on conviction up to $100. This covers all papers broadly. Section 10 makes the making, signing, issuing or accepting and pay- ing negotiable paper, with intent to evade the act, a misdemeanor, with fine on conviction up to $200. This is limited to negotiable paper. Section n makes the accepting any foreign bill of exchange, etc. (no question of intent involved), a misdemeanor, with a fine on conviction up to $100. This applies only to negotiable paper. Section 13, making the registering, issuing, selling or transferring any document etc., in Schedule A, ■with intent to evade the act, a mis- demeanor, with fine on conviction up to $50 or six months, or both. Section g makes the fraudulent use of a stamp without cancelling it (no further question of intent) a misdemeanor, with fine on conviction from $50 to $500, or six months, or both. The Act as it passed the House, provided, in many places, for spe- cific money penalties, and did not make the offenses misdemeanors. In nearly every instance the Senate, besides making intentional eva- sion a misdemeanor, removed the minimum fine and left it to the discretion of the courts to punish a technical error by a nominal fine and a grave offense by a heavy penalty of both fine and imprisonment'. That science and system did not have much part in this law-mak- ing, see a Senator's explanation of his proposed amendment (Cong, 24 THE WAR REVENUE LAW. Rec, p. 5587, May 17, 1898) to add the words " with intent to evade the provisions of this Act"- " I see those words are to be found in some of the old acts in regard to stamps in 1864, 1865, 1866 and along there." (Amendment agreed to.) EFFECT ON THE INSTRUMENT. Section 7 makes any unstamped instrument, document or paper (no question of intent) inadmissible in evidence in any court. (As to rulings of State Courts, see notes to § 14.) Apparently there is no adequate provision for the cure of an innocent omission. Section 13 is limited in its cure to bonds, debentures, cer- tificates of stock or of indebtedness. The relief implied in § 14 by the word " until " will be found limited to the relief of § 13, which con- tains the only provision for post-stamping. Section 10, referring exclusively to negotiable paper, is silent as to the effect on the instrument of the omission to affix stamp with design to evade the act; but apparently these instruments are included in the broad language cf section 7, and are therefore inadmissible in evi- dence and also in the identical terms of section 13, and are therefore invalidated. The British acts have always reversed this rule and have invalidated such quasi-private and temporary papers as negotiable instruments, bills of lading, proxies and marine insurance policies, while generally showing liberality as to post-stamping of other papers, needed in evidence. See Griffith's Stamp Digest, Appendix III, p. 260; Tilsley on Stamp Laws, p. 154, and cases cited; Stamp Act 1891, § 15. Section 13 invalidates and renders of no effect any unstamped instru- ment, document or paper mentioned in Schedule A, when the omis- sion is with intent to evade the act. This refers to the same papers, etc., as section 7, but it adds intent and invalidates the instrument, while section 7 merely makes it inadmissible in evidence. Section 14 broadly prohibits the admission or use in evidence, with- out proper stamps, of any paper required to be stamped, until cured as provided by law, i. c, in the limited way in section 13, which con- tains the only provision for cure. The Act as it passed the House made the unstamped instrument " invalid and of no effect," and also inserted in what is now section 15 the words " shall be utterly void." As to the construction put by the courts on similar clauses in former acts, see, under section 14, as to intent. THE WAR REVENUE LAW. 25 COUNTERFEITING, ETC. Sec. 8. That if any person shall forge or counterfeit, or cause or procure to be forged or counterfeited, any stamp, die, plate, or other instrument, or any part of any stamp, die, plate, or other instrument which shall have been provided, or may hereafter be provided, made, or used in pursuance of this Act, or shall forge, counterfeit, or resemble, or cause or procure to be forged, counter- feited, or resembled, the impression, or any part of the impression, of any such stamp, die, plate, or other instru- ment as aforesaid, upon any vellum, parchment, or paper, or shall stamp or mark, or cause or procure to be stamped or marked, any vellum, parchment, or paper with any such forged or counterfeited stamp, die, plate, or other instru- ment, or part of any stamp, die, plate, or other instrument, as aforesaid, with intent to defraud the United States of any of the taxes hereby imposed, or any part thereof; or if any person shall utter, or sell, or expose for sale, any vellum, parchment, paper, article, or thing having thereupon the impression of any such counterfeited stamp, die, plate, or other instrument, or any part of any stamp, die, plate, or other instrument, or any such forged, coun- terfeited, or resembled impression, or part of impression, as aforesaid, knowing the same to be forged, counter- feited, or resembled ; or if any person shall knowingly use or permit the use of any stamp, die, plate, or other in- strument which shall have been so provided, made, or used as aforesaid, with intent to defraud the United States; or if any person shall fraudulently cut, tear, or remove, or cause or procure to be cut, torn, or removed, the impression of any stamp, die, plate, or other instru- ment which shall have been provided, made, or used in pursuance of this Act from any vellum, parchment, or paper, or any instrument or writing charged or charge- 26 THE WAR REVENUE LAW. able with any of the taxes imposed by law ; or if any per- son shall fraudulently use, join, fix, or place, or cause to be used, joined, fixed, or placed, to, with, or upon any vellum, parchment, paper, or any instrument or writing charged or chargeable with any of the taxes hereby im- posed, any adhesive stamp, or the impression of any stamp, die, plate, or other instrument, which shall have been provided, made, or used in pursuance of law, and which shall have been cut, torn, or removed from any other vellum, parchment, or paper, or any instrument or writing charged or chargeable with any of the taxes im- posed by law ; or if any person shall wilfully remove or cause to be removed, alter or cause to be altered, the canceling or defacing marks of any adhesive stamp with intent to use the same, or to cause the use of the same, after it shall have been once used, or shall knowingly or wilfully sell or buy such washed or restored stamp, or offer the same for sale, or give or expose the same to any person for use, or knowingly use the same, or prepare the same with intent for the further use thereof; or if any person shall knowingly and without lawful excuse (the proof whereof shall lie on the person accused) have in his possession any washed, restored, or altered stamp which has been removed from any vellum, parchment, paper, instrument, or writing, then, and in every such case, every person so offending, and every person know- ingly and wilfully aiding, abetting, or assisting in com- mitting any such offenses as aforesaid shall be deemed guilty of a misdemeanor, and, upon conviction thereof, shall forfeit the said counterfeit stamps and the articles upon which they are placed, and shall be punished by fine not exceeding one thousand dollars, or by imprison- ment and confinement at hard labor not exceeding five years, or both, at the discretion of the court. THE WAR REVENUE LAW. 2"] 1862 (July i), § g8. 1864 (June 30), § 155. 1866 (July 13), § 9. 1869 (April 10), § 2. U. S. R. S., 1878, § 3429. See notes under section 31. CANCELLATION OF STAMPS: PRIYATE PROPRIETARY STAMPS. Sec. 9. That in any and all cases where an adhesive stamp shall be used for denoting any tax imposed by this Act, except as hereinafter provided, the person using or affixing the same shall write or stamp thereupon the ini- tials of his name and the date upon which the same shall be attached or used, so that the same may not again be used. And if any person shall fraudulently make use of an adhesive stamp to denote any tax imposed by this Act without so effectually canceling and obliterating such stamp, except as before mentioned, he, she, or they shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not less than fifty nor more than five hundred dollars, or be imprisoned not more than six months, or both, at the discretion of the court : Provided, That any proprietor or proprietors of proprie- tary articles, or articles subject to stamp duty under Schedule B of this Act, shall have the privilege of fur- nishing, without expense to the United States, in suit- able form, to be approved by the Commissioner of Inter- nal Revenue, his or their own dies or designs for stamps to be used thereon, to be retained in the possession of the Commissioner of Internal Revenue, for his or their separate use,' which shall not be duplicated to any other person. And the proprietor furnishing such dies or de- signs shall be required to purchase stamps printed there- from in quantities of not less than two thousand dollars face value at any one time. That in all cases where such 28 THE WAR REVENUE LAW. stamp is used, instead of cancellation by initials and date, the said stamp shall be so affixed on the box, bottle, or package that in opening the same, or using the contents thereof, the said stamp shall be effectually destroyed; and in default thereof the party making default shall be liable to the same penalty imposed for neglect to affix said stamp as hereinbefore prescribed in this Act. Any per- son who shall fraudulently obtain or use any of the afore- said stamps or designs therefor, and any person forging or counterfeiting, or causing or procuring the forging or counterfeiting, any representation, likeness, similitude, or colorable imitation of the said last-mentioned stamp, or any engraver or printer who shall sell or give away said stamps, or selling the same, or, being a merchant, broker, peddler, or person dealing, in whole or in part, in similar goods, wares, merchandise, manufactures, preparations, or articles, or those designed for similar objects or pur- poses, shall have knowingly or fraudulently in his, her, or their possession any such forged, counterfeited like- ness, similitude, or colorable imitation of the said last- mentioned stamp, shall be deemed guilty of a crime, and, upon conviction thereof, shall be punished by a fine not exceeding five hundred dollars or imprisonment not ex- ceeding one year, or both. 1862 (July 1), § 99. 1864 (June 30), § 156. The person executing the document is the one to affix the stamp, and he should cancel it; the other party can only cancel it with the assent of the maker. (1867) Myers v. Smith, 48 Barb. 614. Neglect to cancel stamp will not invalidate note. (1867) Ballard v. Burnside, 49 Barb. 102, (1870) Union, etc., Assoc, v. Neill, 31 Iowa 95. (1881) Dowell v. Applegate, 7 Sawyer, 232, 7 Fed. R. 881. THE WAR REVENUE LAW. 29 Or make it inadmissible as evidence. (1872) Browne v. Bennett, 24 La. Ann. 618. (1872) Doffin v. Guyer, 39 Ind. 215. (1870) Patterson v. Gile, 1 Col. T. 200. (1868) Adams v. Dale, 29 Ind. 273. The mere failure to cancel a stamp will not prevent the use of an instrument as evidence. (1870) Jacobs v. Cunningham, 32 Tex. 774. A stamp is duly canceled if it is defaced so that it cannot be reused. (1870) Taylor v. Duncan, 33 Tex. 440. The question of cancellation is one of fact for the jury. (1870) Rees v. Jackson, 64 Pa. St. 486. (1869) U. S. v. Brown, Deady, 566 Either party to a contract may affix the stamp. See (1868) Adams v. Dale, 29 Ind. 273. (1865) Teagarden v. Garver, 24 Ind. 399. An innocent omission to cancel the stamps is no ground of defense to a note. (1865) Desmond v. Allen, 10 Allen, 250. Failure duly to cancel a stamp incurs a fine of ten pounds under the English Act (§ 8). Our Act of 1864, § 156, had penalty of $50 if intent was fraudulent. Where stamps on a note were not canceled until the trial of an action to enforce collection, and then the initials of the party were not used, it was yet held sufficient. The court said: " When it is known that there may be large numbers of persons all over the country who might be unable to do this in consequence of a want of sufficient education, or other defects that the party himself could not remedy, it can hardly be supposed that Congress intended to obstruct and defeat the citi- zen's most important right — the right of making contracts — by such minutiee, when the proper tax had been paid, and the law substantially complied with." (1873) Foster v. Holley's Admin., 49 Ala. 593. When a paper is to become the property of another on delivery, and only then is the transaction complete, the person to whom the paper is delivered may affix and cancel the stamps. (1868) Cedar Rapids etc., R. R. Co. v. Stewart, 25 Iowa, 115. Note. — The Commissioner of Internal Revenue has power to pre- scribe such method of cancellation of stamps as substitute for or in 30 THE WAR REVENUE LAW. addition to the method prescribed by law as he may deem expedient. See section 25. That the initial and date method of cancellation is not absolutely obligatory is seen from the approved method of printing the revenue stamp upon checks, etc., so that the ordinary writing on the paper will cancel it. 9 I. R. R. 162. Cancellation: See §§ 156, 157, Act June 30, 1864. The Commissioner authorized the initials and date to be imprinted instead of written. See Circular No. 39, Jan. 16, 1866, Collection 1871, p. 79, warning against certain insufficient and improper methods. The Commissioner later authorized the use of various mechanical contrivances. Circular No. 82, and supplements, Feb. 10, 1870 et seq.. Collection 1871, p. 126. As to cancellation of stamps in court, see notes to section 14. Sale of proprietary stamps on credit. (1880) U. S. v. Goldback, 102 U. S. 623. OMITTING STAMP FROM NEGOTIABLE INSTRUMENT. Sec. 10. That if any person or persons shall make, sign, or issue, or cause to be made, signed, or issued, or shall accept or pay, or cause to be accepted or paid, with de- sign to evade the payment of any stamp tax, any bill of exchange, draft, or order, or promissory note for the pay- ment of money, liable to any of the taxes imposed by this Act, without the same being duly stamped, or hav- ing thereupon an adhesive stamp for denoting the tax hereby charged thereon, he, she, or they shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding two hundred dollars, at the discretion of the court. 1862 (July 1), § 100. 1864 (June 30), § 158. 1866 (July 13), ch. 184. U. S. R. S., 1878, § 3422. These old acts provided for a forfeiture of $50 as a penalty and THE WAR REVENUE LAW. 3 1 made the instrument invalid. But the new act in this section makes it a misdemeanor and says nothing about invalidity. (See note to section 7.) In the plentiful litigation which grew out of the old acts both the forfeiture and the invalidity of the instrument were made to turn on the same question, i. I01 - 1864 (June 30), § 159. Lord Mansfield is cited in support of a maxim that the courts will not take notice of the revenue laws of a foreign state. (1775) Holman v. Johnson, 1 Cowper, 341. We may refuse to go into the question of whether a bill of exchange before our courts has been properly stamped in Europe, but clearly we cannot ignore at least the English law of revenue stamps, for our own is too largely drawn from it. See also: (1823) James v. Catherwood, 3 Dowling & Ryland, 190. (1806) Ludlow v. Van Rensselaer, 1 J. R. (N. Y.) 96. Tilsley's Stamp Laws, 301. Collins on the Stamp Laws, 440, et seq. DISTRIBUTION OF STAMPS. Sec. 12. That in any collection district where, in the judgment of the Commissioner of Internal Revenue, the facilities for the procurement and distribution of adhesive stamps are or shall be insufficient, the Commissioner, as aforesaid, is authorized to furnish, supply, and deliver to the collector of any district, and to any assistant treasurer of the United States or designated depositary thereof, or any postmaster, a suitable quantity of adhesive stamps, THE WAR REVENUE LAW. 33 without prepayment therefor, and may in advance require of any collector, assistant treasurer of the United States, or postmaster a bond, with sufficient sureties, to an amount equal to the value of the adhesive stamps which may be placed in his hands and remain unaccounted for, conditioned for the faithful return, whenever so required, of all quantities or amounts undisposed of, and for the payment monthly of all quantities or amounts sold or not remaining on hand. And it shall be the duty of such collector to supply his deputies with, or sell to other par- ties within his district who may make application there- for, adhesive stamps, upon the same terms allowed by law or under the regulations of the Commissioner of In- ternal Revenue, who is hereby authorized to make such other regulations, not inconsistent herewith, for the secur- ity of the United States and the better accommodation of the public, in relation to the matters hereinbefore men- tioned, as he may judge necessary and expedient. And the Secretary of the Treasury may from time to time make such regulations as he may find necessary to insure the safe-keeping or prevent the illegal use of all such adhesive stamps. 1862 July 1), § 102. 1864 (June 30), § 170. Sale of stamps on credit. (1880) U. S. v. Goldback, 102 U. S. 623. INSTRUMENTS TO BE STAMPED BEFORE REGISTRATION, SALE, ETC.: PENALTY AND REMISSION: POST-STAMPING. Sec. 13. That any person or persons who shall register, issue, sell, or transfer, or who shall cause to be issued, registered, sold, or transferred, any instrument, docu- ment, or paper of any kind or description whatsoever mentioned in Schedule A of this Act, without the same 3 34 THE WAR REVENUE LAW. being duly stamped, or having thereupon an adhesive stamp for denoting the tax chargeable thereon, and can- celed in the manner required by law, with intent to evade the provisions of this Act, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be pun- ished by a fine not exceeding fifty dollars, or by impris- onment not exceeding six months, or both, in the discre- tion of the court; and such instrument, document, or paper, not being stamped according to law, shall be deemed invalid and of no effect : Provided, That here- after, in all cases where the party has not affixed to any instrument the stamp required by law thereon at the time of issuing, selling, or transferring the said bonds, debentures, or certificates of stock or of indebtedness, and he or they, or any party having an interest therein, shall be subsequently desirous of affixing such stamp to said instrument, or, if said instrument be lost, to a copy thereof, he or they shall appear before the collector of internal revenue of the proper district, who shall, upon the payment of the price of the proper stamp required by law, and of a penalty of ten dollars, and, where the whole amount of the tax denoted by the stamp required shall exceed the sum of fifty dollars, on payment also of inter- est, at the rate of six per centum, on said tax from the day on which such stamp ought to have been affixed, affix the proper stamp to such bond, debenture, certificate of stock or of indebtedness or copy, and note upon the mar- gin thereof the date of his so doing, and the fact that such penalty has been paid ; and the same shall there- upon be deemed and held to be as valid, to all intents and purposes, as if stamped when made or issued : And provided further , That where it shall appear to said col- lector, upon oath or otherwise, to his satisfaction, that any such instrument has not been duly stamped, at the THE WAR REVENUE LAW. 35 time of making or issuing the same, by reason of acci- dent, mistake, inadvertence, or urgent necessity, and without any willful design to defraud the United States of the stamp, or to evade or delay the payment thereof, then and in such case, if such instrument, or, if the origi- nal be lost, a copy thereof, duly certified by the officer having charge of any records in which such original is required to be recorded, or otherwise duly proven to the satisfaction of the collector, shall, within twelve calendar months after the making or issuing thereof, be brought to the said collector of internal revenue to be stamped, and the stamp tax chargeable thereon shall be paid, it shall be lawful for the said collector to remit the penalty aforesaid and to cause such instrument to be duly stamped. And when the original instrument, or a certi- fied or duly proven copy thereof, as aforesaid, duly stamped so as to entitle the same to be recorded, shall be presented to the clerk, register, recorder, or other officer having charge of the original record, it shall be lawful for such officer, upon the payment of the fee legally chargeable for the recording thereof, to make a new record thereof, or to note upon the original record the fact that the error or omission in the stamping of said original instrument has been corrected pursuant to law; and the original instrument or such certified copy, or the record thereof, may be used in all courts and places in the same manner and with like effect as if the instrument had been originally stamped: And provided- further, That in all cases where the party has not affixed the stamp required by law upon any such instrument issued, registered, sold, or transferred at a time when and at a place where no collection district was established, it shall be lawful for him or them, or any party having an interest therein, to affix the proper stamp thereto, or, if 36 THE WAR REVENUE LAW. the original be lost, to a copy thereof. But no right acquired in good faith before the stamping of such instru- ment, or copy thereof, as herein provided, if such record be required by law, shall in any manner be affected by such stamping as aforesaid. 1866 (July 13), ch. 184, pp. 142-3. This section is a piece of very bad legislation. Down to the words " Provided, etc." it is a penal prohibition against registering, etc., any documents mentioned in Schedule A, and thus belongs to the series of prohibitions and penalties as above noted. (See p. 23.) Be- ginning with the word " Provided," it is taken, with some change from the amendment of 1866 (ch. 184, pp. 142-3), to § 158 of the Act of 1864. That act was amended to enable the holder, etc., of " any instru- ment " to go before the collector and correct an innocent failure to affix stamps. This present act would seem to have embodied these words with the same laudable intention of affording means of relief against innocent mistake or ignorance, but the whole intent (if such it was) has been destroyed by substituting the words "bonds, debentures or certificates of stock or of indebtedness " in line 18 of the section for the words " any instrument " of the old act. These words appear again in line 30 of the section, and they are so employed as to control the whole proviso; so that it will be seen that only bonds, debentures, certificates of stock or of indebtedness may be post-stamped by the collector, and these only within one year of the issuing, etc. That such could not have been the intention of Congress is too plain for argument. The first proviso .refers to " said bonds, etc.," whereas bonds and the like are not in fact mentioned in the preceding text of the section. The " any such instrument " of the second proviso originally meant any instrument, and thus included such as might require recording with a clerk, register or recorder, but this clearly would not be true of bonds, debentures and certificates of stock. The whole section is a hopeless patchwork and demands speedy correction. Assuming, then, that this section will promptly be amended to con- form to the old act, the following cases are cited: The person to appear before the collector is the one who should have affixed the stamp. (1868) Myers v. Smith, 48 Barb. 614. Contra, (1869) Schermerhorn v. Burgess, 55 Barb. 422. THE WAR REVENUE LAW. 37 The only way, out of court, to cure defect of stamp is to appear before the collector; but when the point arises in court, proof that the omission is not by fraudulent intent, accompanied by an offer to com- ply with the law, will enable the court to receive it in evidence. (1866) Beebe v. Hutton, 47 Barb. 187. As to post-stamping and remitting penalties in case of acc.dent or mistake, see (1868) Peoria Ins. Co. v. Perkins, 16 Mich. 380. (1868) McAfferty v. Hale, 24 Iowa, 355. (1867) Brown v. Crandal, 23 Iowa, 112. After Jan. 1, 1867, the only person empowered to affix an omitted stamp was the collector of the district. (1871) Mobile, etc., R. Co. v. Edwards, 46 Ala. 267. (1871) Corrie v. Billin, 23 La. Ann. 250. A special term of the Superior Court of the City of N. Y. dismissed a suit on an instrument in the nature of a mortgage on the ground that it was void for want of a proper stamp. (1865) Hoppock v. Plato, 30 How. Pr. 120. Under the Act of 1864, an omitted stamp may not be attached in open court to enable a promissory note to be used in evidence. The stamp must be affixed by a revenue officer under § 158 of trie act. (1869) Wigham v. Pickett, 43 Ala. 140. The validity of a contract cannot be impugned for want of a stamp after the omission has been supplied by a revenue officer under the provisions of the law. (1870) Logan v. Dils, 4 W. Va. 397. And see (1870) Hetzell v. Gregory, 7 Phil. (Pa.) 148. (1871) Browne v. Steck, 2 Col. 70. Admissible as evidence are instruments originally unstamped, but subsequently post-stamped under act of Congress. (1867) Cooke v. England, 27 Md. 14. (1867) Corbin v. Tracy, 34 Conn. 325. (1867) Knox v. Hindepoper, 21 Wis. 527. (1866) Tobey v. Chipman, 13 Allen (Mass.) 123. (1866) Patterson v. Eames, 54 Me. 203. (1866) Beebe v. Hutton, 47 Barb. 187. (1866) Dorris v. Grace, 24 Ark. 326. (1865) Carpenter v. Johnson, 1 Nev. 331. 38 THE WAR REVENUE LAW. (1865) Plessinger v. Dupuy, 25 Ind. 419. (1S65) Day v. Barker, 36 Mo. 125. In a partition suit plaintiff's counsel supplied the omitted stamps on the trial and the referee cancelled them. The Court of Appeals, affirming the judgment, said: " Without denying that it is within the power of taxation conferred upon it for Congress to lay an excise tax upon the business operations of communities, and to collect that tax by the means of stamps, to be placed upon the written instruments exchanged between contracting parties, and to enforce the observance of the law to that end by the imposition in it of penalties for its non- observance, we are of the opinion that it is without that power to de- clare that a contract or conveyance between citizens of a State, affect- ing the title to real estate, is void, for the reason that such observance has been omitted. Apart, then, from any consideration of the suffi- ciency of the stamping and the canceling which took place before the referee, we think that these deeds were valid, and passed to the plain- tifl an estate in fee simple." (1872) Moore v. Moore, 47 N. Y. 467. Curing defects. Unstamped instruments cannot be helped by any sort of consent between parties. (1834) Owen v. Thomas, 3 Mylne & Keene, 353. Such an attempt is regarded as a combination to defraud the reve- nue. The courts have frequently frowned upon it. (184S) Bennison v. Jewison, 12 Jur. 485. (1815) Abraham v. Dubois, 4 Campbell, 269. As to when a stamp may be affixed. (1871) Myers v. McGraw, 5 W. Va. 30 (action on bond). As to what kind of a copy may be stamped in lieu of an original in- strument. (1876) Miller v. Wentworth, 82 Pa. St. 280. The Stamp Act of 1862 took effect Oct. 1, and instruments executed and delivered before that date, though recorded afterwards, were not chargeable. Provision was made (§ 163, Act 1864), for post-stamping instruments issued prior to Aug. I, 1864, in the presence of the court or register. After Aug. I, 1864, an instrument could be post-stamped only by the "collector. The stamp to be affixed was that required by the law at the time of the execution. Circular No. 43, March 16, 1866, Collection 1871, p. 86. THE WAR REVENUE LAW. 39 INSTRUMENT NOT ETIDENCE UNTIL STAMPED. Sec. 14. That hereafter no instrument, paper, or docu- ment required by law to be stamped, which has been signed or issued without being duly stamped, or with a deficient stamp, nor any copy thereof, shall be recorded or admitted, or used as evidence in any court until a legal stamp or stamps, denoting the amount of tax, shall have been affixed thereto, as prescribed by law: Provided, That any bond, debenture, certificate of stock, or certifi- cate of indebtedness issued in any foreign country shall pay the same tax as is required by law on similar instru- ments when issued, sold, or transferred in the United States ; and the party to whom the same is issued, or by whom it is sold or transferred, shall, before selling or transferring the same, affix thereon the stamp or stamps indicating the tax required. Act of 1864 (June 30), § 163. Act of 1866, ch. 184. ADMITTED IN EVIDENCE. Congress can not Make Rules of Evidence for State Courts. A stamp was omitted from a promissory note, through sheer forget- fulness or ignorance, but was affixed by payee before suit brought. Held admissible. The court said: " While we concede to the Con- gress the power to lay and collect taxes, duties, imposts and excises to pay the debts of the Union, we deny its power to go into the States and under the pretense of laying and collecting such taxes take away from the States legitimate and long-established rights which they have ever, and for their own preservation must be allowed to exercise without question." (1867) Latham v. Smith, 45 111. 29. And see (1872) Moore v. Moore, 47 N. Y. 467 (cited more fully at p. 38, ante). Congress can punish a violation or an evasion of the stamp law, but it is for each State to determine the rules of evidence in its own courts. Therefore, while the federal act applies to federal courts, it cannot forbid the reception of an unstamped instrument in a State court. 4-0 THE WAR REVENUE LAW. (1868) Craig v. Dimock, 47 111. 308. (1869) Clemens v. Conrad, 19 Mich. 170. (1870) Spooner v. Eifler, 1 Heisk. (Tenn.) 633. (1870) Moore v. Quirk, 105 Mass. 49. (1870) Bumpass v. Faggart, 26 Ark. 398. (1870) Wallace v. Craven, 34 Ind. 534. (1871) Davis v. Richardson, 45 Miss. 499. Contra, (1865) Plessinger v. Dupuy, 25 Ind. 419. (1872) Chartiers, etc., Co. v. McNamara, 72 Pa. 278. It may be read in evidence, although the stamp is uncanceled. (1871) Patterson v. Gile, 1 Col. Ter. 200. (1865) Goodwine v. Wands, 25 Ind. 101. The federal act, so far as it prescribed a rule of evidence, was operative only in the federal courts. (1870) Peo. ex rel. Barbour v. Gates, 43 N. Y. 40. (1867) Carpenter v. Snelling, 97 Mass. 452. (1870) Duffy v. Hobson, 40 Cal. 240. (1870) Dailey v. Coker, 33 Texas, 815. When a stamp has been omitted by ignorance, it may be affixed later, when the need of it has been ascertained. (1868) Green v. Lowry, 38 Ga. 548. (1866) Tobey v. Chipman, 13 Allen 123. (1867) Tripp v. Bishop, 56 Pa. 424. But after the payee is dead, the maker cannot supply an omitted stamp, and even if he does so, he can defend on ground of invalidity for lack of stamp when note was made. (1868) Weyman v. Torreyson, 4 Nev. 124. (1866) Maynard v. Johnson, 2 Nev. 16. But see (1870) Mercer v. Mercer, 29 Iowa, 557 (as to a deed). An unintentional omission to stamp a promissory note may be cor- rected by an authorized attorney holding the note. (1870) Vaughan v. O'Brien, 39 How. Pr. 515. (1867) Blunt v. Bates, 40 Ala. 470. An omitted stamp may be affixed in open court to a note for use as evidence. (1865) Garland v. Lane, 46 N. H. 245. (1870) Morris v. McMorris, 44 Miss. 441. (1872) Waterbury v. McMillan, 46 Miss. 635. (1870) Janvrin v. Fogg, 46 N. H. 340. THE WAR REVENUE LAW. 41 So in England: (1834) Beckwith v. Benner, 6 Carrington & Payne, 681. Indeed decrees in chancery have been kept back to afford time for supplying the stamps. (1822) Chervet v. Jones, 6 Mad. 267. (1834) Owen v. Thomas, 3 Mylne & Keen, 353. See English Stamp Act of 1891, ch. 39, § 14. INTENT— INVALIDATE. The courts repeatedly and in many States held that the neglect duly to stamp an instrument must be fraudulent to invalidate it. A New York court manifested impatience at being called upon to reassert a rule so well established. (1869) Frink v. Thompson, 4 Lansing, 489. (1872) Baker v. Baker, 6 Lansing, 509 (citing cases and discrediting some early decisions pointing the other way). On the necessity of showing fraudulent intent, see (1867) Vorebeck v. Roe, 50 Barb. 302. (1869) Howe v. Carpenter, 53 Barb. 382. (1870) Vaughan v. O'Brien, 57 Barb. 491; s. c. 39 How. Pr. 515. (1869) Green v. Holway, 101 Mass. 243. (1867) Holyoke M. Co. v. Franklin P. Co., 97 Mass. 150. (1866) Beebe v. Hutton, 47 Barb. 187. (1866) Baird v. Pridmore, 31 How. Pr. 359. (1870) Morris v. McMorris, 44 Miss. 441. (1869) Whitehill v. Shickle, 43 Mo. 537. (1866) Dorris v. Grace, 24 Ark. 326. (1866) Govern v. Littlefield, 13 Allen, 127. (1870) Rheinstrom v. Cone, 26 Wis. 163. (1871) Brown v. Thompson, 59 Me. 372. (1869) Weltner v. Riggs, 3 W. Va. 445. (1867 Hallock v. Jaudin, 34 Cal. 167. (1872) Works v. Hershey, 35 Iowa, 340. (1872) Morgan v. Graham, 35 Iowa, 213. (1873) Emery v. Hobson, 63 Me. 33. (1874) Perryman v. Greenville, 51 Ala. 507. (1874) Oxford Iron Co. v. Spradley, 51 Ala. 171. (1867) Hitchcock v. Sawyer, 39 Vt. 412. (1865) Corry Nat. Bk. v. Rouss, 3 Pittsb. 18. (1872) Timp v. Dockham, 29 Wis. 440. (1872) State v. Hile, 30 Wis. 416. 42 THE WAR REVENUE LAW. (1867) Harper v Clark, 17 Ohio St. 190. (1867) Dudley v. Wells, 55 Me. 145. The burden of proof of showing the intent to be fraudulent is on the person objecting to the offer in evidence. (1869) N. H., etc., Co. v. Quintard, 31 How. Pr. 29; s. c. 6 Abb. Pr. N. S. 128; I Sweeny, 89 (which contains a full discussion). (1871) Ricord v. Jones, 33 Iowa, 26. The ground of objection must be that the omission was with intent to defraud the government. (1869) Quinn v. Lloyd, 1 Sweeny, 253. The severity of the Act of 1 July, 1862, which declared unstamped instruments to be invalid, was mitigated by the Act of 14 July, 1862, providing that an instrument issued unstamped before 1st Tan. 1863, should not be invalid, but must be stamped and a penalty of $5 be paid before it could be used as evidence. The Act of 25th Dec, 1862, again amended the law as to instruments issued unstamped before 1 Mch., 1863, which are not to be invalid, but must be stamped before being used as evidence, and this could be done in court. The Act of 3 Mch., 1863, further extended the time from 1 Mch., 1863, to r June, 1863. This leniency was shown because of the known lack of stamps dur- ing the early months of the system. It may be that some such enabling acts will be required to prevent hardship under the new law. But the necessity will depend upon the determination of the questions raised at pages 34, 37, 24, concerning the invalidity provision of the law. The stamp is no part of the note. In order to defeat a recovery on an unstamped note, it must appear not only that the note is un- stamped, but that the stamp has been fraudulently omitted, which, of course, cannot be done on demurrer, but must be done by answer. (1867) Hallock v. Jaudin, 34 Cal. 167. (1866) Trull v. Moulton, 12 Allen (Mass.) 396. Stamp no part of a note and need not appear on the record of an appeal. (1872) Owsley v. Greenwood, 18 Minn. 429. (1871) Prather v. Tulauf, 38 Ind. 155. (1871) Cabbott v. Radford, 17 Minn. 320. Where certified copy of a mortgage is oftered in evidence the pre- THE WAR REVENUE LAW. 43 sumption is that the recording officer required the necessary stamps to be affixed. (1872) Grand