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DECISIONS UNDER WAR-REVENUE ACT.
AUTHORITY OF DECISIONS OF COMMISSIONER OF INTERNAL
No appeal save to the courts. The decisions of the Commissioner are authoritative, and can not be overruled by any
other executive officer-Appoal to the courts can only be made after taxes have boon paid and application for refunding rejected by the Commissioner.
Washington, D. C., December 22, 1898. SIB: On the 22d of November this office acknowledged to you the receipt of a lettér from Mr. Frank H. Platt, 35 Wall street, New York City, inclosing a blank form, on which the United States Express Company does its business in the transfer of money by telegraph, and asking the liability to the stamp tax of such transactions. Mr. Platt further stated that Deputy Collector Wood had informed the company that these telegraphic orders were taxable at the rate of 2 cents per $100 or fraction thereof.
This office instructed you to advise Mr. Platt that an order for the transfer of money by telegraph within the United States requires a 2-cent stamp as an order for the payment of money at sight or on demand, and the message transmitting the order requires a 1-cent stamp, as required by law on telegraphic messages, and not a 2-cent stamp on each $100 or fraction thereof.
On November 29 Mr. Platt acknowledged the receipt of your instructions pursuant to the foregoing, and made the following statement:
As this is a legal question upon which there is room for reasonable difference of opinion, and as we think that the decision of the Commissioner of Internal Revenue is not in accordance with the law, may we-suggest to you that the matter be immediately submitted by you to tho United States attorney, with a view to having the question submitted to the United States court on an agreed statement of facts? In that way we can obtain an authoritative decision on the subject without any delay.
You will please inform Mr. Platt that the internal-revenue tax is not collected through the courts, and the decisions of the Commissioner of Internal Revenue on the subject are authoritative, and no other executive officer has the power to overrule them. The courts can be appealed to after the Commissioner's decisions have been complied with, and not before. The statutes provide the machinery for the appeal after application has been made to the Commissioner of Internal Revenue for refunding.
Mr. Platt seems to labor under a grave misapprehension in regard to the manner in which the internal revenues are collected. If persons who objected to the decisions of a Commissioner of Internal Revenue were at liberty to appeal to the courts before payment, very few dollars would flow into the Treasury, at least for the first few years after an interual-revenue bill was enacted. The statutes have, therefore, wisely provided that no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court (sec. 3224, Rev. Stats.)
You are therefore directed, if you find that the United States Express Company has not been complying with the law, as above defined by the Commissioner of Internal Revenue, to call on said company for a return of the amount of taxes not so paid, and on failure to receive such a return you will proceed to make an assessment, from the best information you can obtain, covering the annount. This assessment, if not paid after due notice, must be collected by distraint, and after payment Mr. Platt cau seek his remedy, if so disposed, through the courts. Respectfully, yours,
N. B. SCOTT, Commissioner. Mr. CHARLES H. TREAT,
Collector Second District, New York, N. Y.
AGREEMENTS OF SALE, ETC.
(See also DECISION 19972, p. 279; 20093, p. 66.)
Stamp tax-Agreement of sale, etc., at live-stock exchanges.
Transactions of live-stock exchanges—Duty of exchanges, when sale is made, or an
agreement of sale, or an agreement to sell entered into, to give to buyer a bill, memorandum, or other evidence of such sale, and to place thoroon the required stamp.
Washington, D. O., July 20, 1898. SIR: I have considered the question whether the transactions of the Kansas City Live Stock Exchange, to which you call my attention, are liable to tax under the war-revenue act.
The law provides as follows:
Upon each sale, agreement of sale, or agreement to sell any produce or merchandise at any exchange or board of trade, or other similar place, either for present or future delivery, for each one hundred dollars in value of said sale, or agreement of sale, or agreement to sell, one cent; and for each additional one hundred dollars or fractional part thereof in excess of one hundred dollars, one cent.
Live stock bought and sold in the market should, in my opinion, be covered under the head of merchandise. I hold, therefore, if live stock is sold at an exchange or board of trade or other similar place, either for present or future delivery, the sale, agreement of sale, or agreement to sell should be evidenced by a bill, memorandum, or agreement to be delivered by the seller to the buyer, and this evidence should have the stamp required in the act.
If the above-named association is not operating under a misnomer, it is an exchange, the name adopted by the association itself being “The Kansas City Live Stock Exchange.” The business of the concern is to deal in live stock, cattle, and, as I understand, negotiate sales for the owners of such stock, who bring or send it to Kansas City to be put upon the market.
I think the business carried on by this exchange is included within the provisions of the paragraph of the act to which I have above referred, and that it is the duty of this exchange, when a sale is made, or an agreement of sale, or an agreement to sell entered into, to give to the buyer a bill, memorandum of agreement, or other evidence of such sale, agreement of sale, or agreement to sell, and to place thereon the stamp required by the act, which is 1 cent for each $100 in value of the said sale, agreement of sale, or agreement to sell, and 1 cent for each additional $100 or fractional part thereof in excess of $100. Respectfully, yours,
N. B. SCOTT, Commissioner. Hon. M. S. PETERS,
House of Representatives, Washington, D. C.
Stamp tax-Sales at live-stock exchanges. Tax on sales “at any exchange, or board of trade, or other similar place"-Live stock
comes within the classification of “any products or merchandise "_"Similar place” defined in reference to the selling of live stock; sales of live stock at such places as those defined subject to taxation.
Washington, D. O., September 13, 1898. SIR; Your letter of the 2d instant, relative to the business transactions at the Union Stock Yards, South Omaha, has been received, with inclosures.
You report that at this place commission merchants have in charge various lots of live stock shipped from different points to them for sale, and that it is the practice there for commission men to meet with bay. ers for the large packing house companies, who inspect the various lots of such stock as they desire to purchase, make offers for the same, and when a trade or deal is made the stock yards company issues to the seller a ticket showing the items relating to the transaction, and the commission men (the sellers), issue to the person to whom the stock is sold a bill of sale describing the stock sold, with weight and rate, and giving the date and place where sold, samples of which papers in a transaction by Wood Brothers with the Hammond Packing Company and by the Rosenbaum-Buchanan Company with Swift & Co. are inclosed with your letter.
You state that a member of the Rosenbaum-Buchanan Company informed you that similar papers were submitted to this office for decision some time ago, but that no answer had been received. " He also stated that business was done in the same manner at the Union Stock Yards, of Chicago; that his firm was ready and willing to stamp if they were liable, and would show their books and pay from the time the law went into effect, but that they could not observe the law if others did not, because the expense of stamping would be charged up to their customers, and if they should charge and others did not they would lose trade; they are, therefore, waiting to see what Chicago is
going to do, and for a decision as to their liability." You state that during the trading at this place everything is done verbally, and that no memoranda of sale are made or passed, but at the conclusion of the deal the stock yards company make a ticket showing the class, number, and weight of the stock sold, upon which the commission merchant who sells the stock makes out a bill (like the sample you inclose) and sends to the buyer of the stock; that the company purchasing indorses this bill with an order for the bank to pay the amount, attaching a 2-cent revenue stamp, the same as to a check. This bill or memorandum of sale complies, in its terms, with the requirements imposed by the provisions of the act of June 13, 1898, in Schedule A, in all respects, with the exception that there is not affixed to the same a lawful stamp or stamps in value equal to the amount of tax on the sale. The commission merchant also makes out and renders an account of sales to the party shipping live stock to him.
The case submitted by the Rosenbaum-Buchanan Company was settled on the 10th instant in a letter to Hon. William V. Allen, United States Senator from Nebraska, who had forwarded the papers therein by request of Mr. E. M. Bartlett, their attorney. In his legal opinion Mr. Bartlett advised these parties that their business is that of a commission merchant, and he objects to the payment of tax by commission merchants on their contracts, as he styles them. It was explained, however, in the decision in regard to their case that the question depends entirely upon the method under which the business is conducted, and they will understand fully from its terms that they come within the provisions of the law imposing a tax upon sales made at “any exchange or board of trade or other similar place.” There can be no question but that live stock must be included within the desig. nation of "products or merchandise," upon the sales of which tax is imposed. Whether or not the place where their sales are made is similar to that of an exchange or board of trade is the only point remaining. The distinctive feature prominent at an exchange or board of trade is an assemblage of traders in order to obtain the best market and most favorable dealings. It is not necessary, in order that sales of live stock should be brought within the provisions of this act, that they should be conducted at a building in the heart of the city. Similar features to those of an exchange or board of trade can exist as well at the Union Stock Yards or any other chosen place—that is to say, at a place where a number of traders, buyers and sellers, meet.
The Union Stock Yards at your city, or such yards in any other part of the country, are not an exchange or a board of trade, but in the business transacted at all such places, and within their limits, the trading and opportunities afforded to make trade by the commingling of traders, buyers and sellers, of the property there dealt in, they come within the exact description of being a “similar place" thereto, and the sales made there are clearly within the provisions of the law impos