INTERNAL REVENUE. (19791.) TREASURY DEPARTMENT, Washington, D. C., July 28, 1898. To collectors and internal revenue agents : Hereafter in making examinations of the files of telegraph companies and sleeping-car companies to ascertain if the law has been complied with with reference to stamping telegrams and sleeping-car tickets, you are advised that such examination should be restricted to simply ascertaining if the documents referred to have been properly stamped. These instructions are particularly applicable to telegrams where neither the public good nor the safety of the revenues requires that they should be delivered to the examining officer. In such cases it is pot expected that all the telegrams sent by the company from any one point should be examined. Such examinations will be considered ample if sufficient telegrams of any date called for by the examining officer are passed through the hands of a representative of the company in the presence of the examining officer in such a manner as to enable him to see that they are properly stamped. A knowledge of the contents of the telegrams is not essential to the examining officer. N. B. SCOTT, Commissioner. (19792.) Special tax-Kinetoscopes. Exhibitions of Edison's kinetoscopes require payment of a special tax of $10 in each State where such exhibitions are had. TREASURY DEPARTMENT, Washington, D. O., July 28, 1898. SIR: In reply to the letter addressed to you by Mr. J. B. Norton, of Comanche, Tex. (which you have referred to this office), wherein he states that he contemplates giving a series of exhibitions of Edison's kinetoscope in that State, “and will donate 25 per cent of receipts to the public schools at each place,” will you please inform him that he is required to pay a special tax of $10 under paragraph 8 of section 2 of the act of June 13, 1898, for these exhibitions begun in the month of July in the State of Texas. The one special tax stamp taken out by him will answer for these exhibitions in any city, town, or other place in the State of Texas. If he should go into another State, the terms of the statute require that he should make return and pay another special tax for the latter State, and So on. Respectfully, yours, N. B. SCOTT, Commissioner. Hon. S. W. T. LANHAM, House of Representatives, Washington, D. C. (19793.) Special tax-Bankers. Borrowed capital must be taken into account in estimating amount of special tax required from bankers under the first paragraph of section 2, act of June 13, 1898. TREASURY DEPARTMENT, Washington, D. C., July 28, 1898. SIR: In reply to the letter addressed to you on the 21st instant by Mr. F. G. Renner, of the firm of Woerishoffer & Co., bankers, 52 Exchange Place, New York, which you have referred to this office, will you please inform him that the sum of $75,000, borrowed by them (as he states) for use by his company as capital in the banking business, must be taken into account in estimating the amount of special tax required to be paid by the company as bankers under the first paragraph of section 2 of the act of June 13, 1898. Respectfully, yours, N. B. SCOTT, Commissioner. Mr. CHAS. H. TREAT, Collector Second District, New York. (19791.) Stamp tax-Railroad telegraphic messages. Telegraphic messages of railroad companies, concerning the affairs and service of the companies, when exempt. TREASURY DEPARTMENT, Washington, D. C., July 28, 1898. SIR: I have your letter of the 22d instant, stating that Mr. L. S. Thorne, vice-president and general manager of the Texas and Pacific Railway Company, asks you to obtain a ruling from this office as to whether telegraphic communications, as described by him, and the conditions under which sent, are exempt from stamp tax under the war-revenue law or otherwise, as follows: Telegrams sent over railway wires without any tolls being collected, relating strictly to railway business, particularly messages sent by one company to a connecting line company by their own employees, over their own telegraphic lines owned by the respective companies, referring particularly to the handling of trains, delivery of freight, or other such business in which both companies are interested, which messages are handled over the railway wires of the two companies, neither company making charge against the other company for telegrams so sent. Reference is made particularly to routine business, such as telegraphic notices from one dispatcher's office to the dispatcher's office of a connecting line, as to the arrival of United States mail and passenger trains, special trains of live stock, and perishable freight; the movement of special trains, including trains of Government troops and supplies, etc., which notices it is necessary for railway companies to give and receive in order to properly handle such business. In reply, I have to say that you are no doubt aware that, under date of the 14th instant, this office ruled, in a letter to the Western Union Telegraph Company, that all messages of railroad officials and employees sent from stations on their respective railroads to places beyond the same must be stamped. It seems to be apparent that this ruling does not provide for the joint and mutual business of connecting railroad lines, such as described in your letter. Upon full consideration, I am of the opinion that section 18 of the war-revenue law authorizes and requires the exemption from stamp taxation of all messages of railroad companies concerning all “the affairs and service of the company,” and of such messages, by and to connecting companies, in respect to the joint and mutual business of each, such as described in your letter. It would seem to be a matter of good public policy in the interest of the public and for the safety of passengers that such free communication should be had between connecting companies as to all joint and mutual business in which there is a joint interest and responsibility to the public. This office rules, therefore, that such messages are within the exemption of the second proviso of section 18, and do not require to be stamped. It should be definitely understood, however, that messages to a connecting line, in relation to the business of one line alone, are not included in the exemption. Respectfully, yours, N. B. SCOTT, Commissioner. Mr. S. GUTHRIE, Representing Texas and Pacific Railway Co., Washington, D. C. (19795.) Money orders sent by telegraph or express—Instructions. TREASURY DEPARTMENT, Washington, D. C., July 29, 1898. SIR: It is known that the Western Union and other telegraph companies do a somewhat extensive business in the way of telegraphing money orders. These are all taxable at the rate of 2 cents for each order, being orders for the payment of a sum of money. It is suggested that you detail one of your deputies to ascertain if these orders are being duly stamped. Also please ascertain if the large express companies doing a money-order business are paying the tax on the same. It also would be well to notify banks transferring money by telegraphic order that all such orders are liable to a tax at the rate of 2 cents, in addition to the tax on the dispatch or telegram. Respectfully, yours, N. B. SCOTT, Commissioner, Mr. C. H. TREAT, Collector Second District, New York, N. Y. (19796.) Cancellation of documentary and proprietary internal revenue stamps. [Int. Rev. Circular No. 507.] TREASURY DEPARTMENT, Washington, D. C., July 29, 1898. In any and all cases where an adhesive stamp shall be used for denoting any tax imposed by the act of June 13, 1898, the person using or affixing the same shall write or stamp thereon, with ink, the initials of his name and the date (year) in which the same shall be attached or used, or shall by cutting and canceling said stamp with a machine or punch which will affix the initials and date as aforesaid so deface the stamp as to render it unfit for reuse. The cancellation by either method should not so deface the stamp as to prevent its denomination and genuineness from being readily determined. Stamps imprinted upon the face of checks, drafts, or other similar instruments may be canceled by dating and signing the check or draft, and filling out the blank lines in writing across the face of the stamp in the usual manner of drawing checks and drafts. Stamps on checks and drafts may also be canceled by perforating through said stamp and the paper to which it is attached the amount in figures for which said check or draft is drawn. Where proprietary stamps printed from private dies are used for the payment of tax upon proprietary articles, instead of cancellation by initials and date, such stamps 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. Prescribed by the Commissioner of Internal Revenue under authority conferred by the act aforesaid. N. B. SCOTT, Commissioner. (19797.) Special tax— Returns of banks. Tax to be computed upon capital including surplus, undivided profits, etc.—Method of computing capital and surplus for preceding fiscal year. TREASURY DEPARTMENT, Washington, D. C., July 29, 1898. SIR: Your letter of the 27th instant relative to the preparation of your return for payment of special tax imposed by the war-revenue act of June 13, 1898, to take effect July 1, 1898, has been received. In preparing your return you will be guided by the following rules : The law, section 2, specifically provides that the tax shall be computed upon the capital, and that, in estimating capital, surplus shall be included. In estimating surplus this office holds that undivided profits must be included. The law also specifically provides that 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, and this office holds that if the capital and surplus varied from time to time during the preceding fiscal year the same may be averaged, as was specifically provided by law in the case of capital under the revenue act of June 30, 1864. It was found to be necessary in the case of deposits under the act of 1864 to ascertain the average by adding together the amounts at the close of business of each business day and dividing the amount by the number of business days. This method shonld be adopted under the new law. The need of averaging is obviously greatest as to undivided profits. It is held to be improper to reduce the amount of undivided profits by unaccrued interest or by profits to be divided. Respectfully, yours, N. B. SCOTT, Commissioner. Mr. L. W. BURLEN, Cashier The Columbian National Bank, Boston, Mass. 17 |