Neild v. District of Columbia
Opinion of the Court
Congress enacted a revenue law for the District of Columbia, effective August 17, 1937, which imposed a gross receipts tax upon the privilege of engaging in business in the District during the fiscal year 1937-1938.
The tax imposed in the present case-was based upon gross receipts from busi-.
Appellants contend that the decision of the lower court was erroneous because (1) commerce between the District of Columbia and a state is interstate commerce within the meaning of the Constitution; (2) hence the tax in the present case was levied upon gross receipts from transactions carried on by them in interstate commerce; and (3) such tax constitutes a direct and unlawful burden thereon.
Power to legislate for the District of Columbia is expressly delegated by the Constitution. Article I, Section 8, Clause 17, gives to Congress power “To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, * [Italics supplied] That delegation is sweeping and inclusive in character, to the end that Congress may legislate within the District for every proper purpose of government.
In support of their contention, appellants rely upon the language of cases in which it has been said that Congress may exercise within the District substantially the powers which the legislature of a state may exercise within that state;
Appellants contend further that although Congress has power to impose a burden upon interstate commerce, if it does so, the burden imposed must be uniform throughout the nation;' hence, that it has indulged in an improvident exercise of power in the present case, because the statute here in controversy imposes a burden upon the commerce of a limited area only. There are several answers to this contention. In the first place, as has been pointed out already, this statute is an exercise of the power of Congress to legislate for the District of Columbia and not an exercise of its power to regulate com
Whether it may be wise for Congress to úse, for the District, a method of taxation which would contravene — if they were applicable — the prohibitions imposed by the commerce clause upon the states, and thus to erect barriers which they are forbidden to erect, is indeed a serious question of public policy
Appellants contend further that the Act violates the due process clause of the Fifth Amendment because — they argue — it is retroactive, arbitrary and confiscatory in its operation; for, while it purports to im
So far as concerns the due process clause of the Fifth Amendment, generally, the Supreme Court has said: “That a federal statute passed under the taxing power may be so arbitrary and capricious as to cause it to fall before the due process of law clause of the Fifth Amendment is settled.”
A frequently quoted statement by Justice Story, describes a retroactive law as follows; It “takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transactions or considerations already past * * *,”
Paraphrasing the language of the Supreme Court in Educational Films Corp. v. Ward,
Appellants contend also that the Act is unconstitutional because it is discriminatory and arbitrary; for the reason that no sufficient difference exists between a commission merchant who engages in consignment transactions, and a wholesaler who purchases and sells outright, to justify a classification based thereon; or to justify a tax based upon the gross receipts of the latter, while the former is taxed only upon gross commissions.
In Lappin v. District of Columbia
The delegation to Congress, of power to exercise exclusive legislation in all cases over the District of Columbia, included the power to tax.
Stewart Dry Goods Co. v. Lewis,
We have carefully considered all appellants’ assignments and find them to be without merit.
Affirmed.
50 Stat 673, 688.
Cf. Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, 59 S.Ct. 272, 83 L.Ed. 325; Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U.S. 326, 336, 7 S.Ct. 1118, 30 L.Ed. 1200; Adams Mfg. Co. v. Storen, 304 U.S. 307, 311, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429; Western Live Stock v. Burean of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944.
Cf. The Trade-Mark Cases, 100 U. S. 82, 96, 25 L.Ed. 550: “* * * commerce among the Stales means commerce between the individual citizens of different States * * .” See Hepburn & Dundas v. Ellzey, 2 Cranch, U. S., 445, 452. 2 L.Ed. 332; Baltimore & O. Railroad Co. v. Harris, 12 Wall., U.S., 65, 86, 20 L.Ed. 354; Downes v. Bidwell, 182 U.S. 244, 259, 21 S.Ct. 770, 45 L.Ed. 1088; Hooe v. Jamieson, 166 U.S. 395, 397, 17 S.Ct. 596, 41 L.Ed. 1049; New Orleans v. Winter, 1 Wheat., U.S., 91, 94, 4 L.Ed. 44, all holding that a citizen of the District of Columbia is not a citizen of a state within the meaning of the Constitution, and, hence, could not sue in the circuit eourts of the United States on the ground of diversity of citizenship. Hepburn & Dundas v. Ellzey, supra: “ * * * the members of the American confederacy only are t-he states contemplated in the constitution.” It has been held that the full faith and credit clause (U.S.Const. Art. IV, § 1) has no reference to the District of Columbia. Embry v. Palmer, 107 U.S. 3, 2 S.Ct. 25, 27 L.Ed. 340; 1 Willoughby, Constitution of the United States, 2d Ed. 1929, § 145. It has been held, also, that the privileges and immunities clause (U.S.Const. Art. IV, § 2, 01. 1) is a limitation upon the states only .and in no way affects the powers of Congress over the District of Columbia or the territories. Duehay v. Acacia Mut. Life Ins. Co., 70 App.D.C. 245, 105 F.2d 768, 775, 124 A.L.R. 1268.
Jefferson v. District of Columbia, 40 App.D.C. 381. See also, Hyde v. Southern Ry. Co., 31 App.D.C. 466, 469, 470; Washington Ry. Co. v. Downey, 40 App.D.C. 147, 151, appeal dismissed, 236 U.S. 190, 35 S.Ct. 406, 59 L.Ed. 533.
See Kendall v. United States ex rel. Stokes, 12 Pet., U.S., 524, 619, 9 L.Ed. 481; Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 434, 435, 52 S.Ct. 607, 76 L.Ed. 1204; O’Donoghue v. United States, 289 U.S. 516, 539, 53 S.Ct. 740, 77 L.Ed. 1356; Washington Loan & Trust Co. v. Allman, 63 App.D.C. 116, 70 F.2d 282, certiorari denied, 292 U.S. 649, 54 S.Ct. 859, 78 L.Ed. 1499; Capital Traction Co. v. Hof, 174 U.S. 1, 5, 19 S.Ct. 580, 43 L.Ed. 873; La Forest v. Board of Commissioners, 67 App.D.C. 396, 399, 92 F.2d 547, 550, certiorari denied, 302 U.S. 760, 58 S.Ct. 367, 82 L.Ed. 588; Roberts v. Bradfield, 12 App.D.C. 453, 463, affirmed, 175 U.S. 291, 20 S.Ct. 121, 44 L.Ed. 168; Stoutenburgh v. Hennick, 129 U.S. 141, 147, 9 S.Ct. 256, 32 L.Ed. 637.
Kendall v. United States ex rel. Stokes, 12 Pet., U.S., 524, 619, 9 L.Ed. 1181.
Pollard v. Hagan, 3 How., U.S., 212, 223, 11 L.Ed. 565; Washington Loan & Trust Co. v. Allman, 63 App.D.C. 116, 118, 70 F.2d 282, 284, certiorari denied 292 U.S. 649, 54 S.Ct. 859, 78 L.Ed. 1499.
See Stoutenburgh v. Hennick, 129 U.S. 141, 147, 9 S.Ct. 256, 32 L.Ed. 637.
See El Paso & Northeastern R. Co. v. Gutierrez, 215 U.S. 87, 93, 30 S.Ct. 21, 54 L.Ed. 106; Downes v. Bidwell, 182 U.S. 244, 268, 21 S.Ct. 770, 45 L.Ed. 1088; Citizens’ Sav. & Loan Ass’n v. Topeka, 20 Wall., U.S., 655, 662-663, 22 L.Ed. 455.
See First National Bank v. County of Yankton, 101 U.S. 129, 133, 25 L.Ed. 1046; Mormon Church v. United States, 136 U.S. 1, 44, 10 S.Ct. 792, 34 L.Ed. 481; Capital Traction Co. v. Hof, 174 U.S. 1, 5, 19 S.Ct. 580, 43 L.Ed. 873; Sims v. Rives, 66 App.D.C. 24, 31, 84 F.2d 871, 878, certiorari denied, 298 U.S. 682, 56 S.Ct. 960, 80 L.Ed. 1402.
See also, Wight v. Davidson, 181 U.S. 371, 384, 21 S.Ct. 616, 45 L.Ed. 900, holding the Fourteenth Amendment inapplicable to the District of Columbia. On the other hand, the rights and liberties protected by the bill of rights (Amendments I to VHI) against encroachment by the national government have been held applicable to the District although not to the states. Thus, the provisions of the Fourth Amendment are not applicable to the states (National Safe Deposit Co. v. Stead, 232 U.S. 58, 34 S.Ct. 209, 58 L.Ed. 504; Ohio ex rel. Lloyd v. Dollison, 194 U. S. 445, 24 S.Ct. 703, 48 L.Ed. 1062), although they are to the District. United States v. Mattingly, 52 App.D.C. 188, 285 F. 922. The Fifth Amendment requires that a person in the District shall not be tried for the commission of a crime unless on presentment or indictment of a grand jury (United States v. Moreland, 258 U.S. 433, 42 S.Ct. 368, 66 L.Ed. 700, 24 A.L.R. 992), whereas, so far as the states are concerned, this may be dispensed with. Gaines v. Washington, 277 U.S. 81, 86, 48 S.Ct. 468, 72 L.Ed. 793; Hurtado v. California, 110 U.S. 516, 4 S.Ct. 111, 292, 28 L.Ed. 232; Palko v. Connecticut, 302 U. S. 319, 323, 58 S.Ct. 149, 82 L.Ed. 288. Double jeopardy is prohibited in cases of crimes committed in the District (Steck v. United States, 56 App.D.C. 368, 15 F.2d 606), but a like prohibition does not apply to state action. Palko v. Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288. See also, Twining v. New Jersey, 211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97. In Callan v. Wilson, 127 U.S. 540, 550, 8 S.Ct. 1301, 32 L.Ed. 223, it was held that under the Sixth Amendment one charged with a crime in the District is entitled to jury trial, although the right to such trials may be abolished by the states. See Jordan v. Massachusetts, 225 U.S. 167, 176, 32 S.Ct. 651, 56 L.Ed. 1038; Maxwell v. Dow, 176 U.S. 581, 20 S.Ct. 448, 494, 44 L.Ed. 597; United Gas Public Serv. Co. v. Texas, 303 U.S. 123, 141, 58 S.Ct. 483, 82 L.Ed. 702. Likewise, the right to trial by jury in common law actions, as provided by the Seventh Amendment, is a limitation upon the District (Capital Traction Co. v. Hof, 174 U.S. 1, 5, 19 S.Ct. 580, 43 L.Ed. 873; Callan v. Wilson, supra) but not upon the states. St. Louis & Kansas City Land Co. v. Kansas City, 241 U.S. 419, 431, 36 S.Ct. 647, 60 L.Ed. 1072; Pearson v. Yewdall, 95 U.S. 294, 24 L.Ed. 436.
Shoemaker v. United States, 147 U.S. 282, 300, 13 S.Ct. 361, 37 L.Ed. 170.
Cf. New York v. Miln, 11 Pet., U.S., 102, 139, 9 L.Ed. 648; Nebbia v. New York, 291 U.S. 502, 523, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469.
Cohens v. Virginia, 6 Wheat., U. S., 264, 429, 5 L.Ed. 257: “* * * congress is not a local legislature, but exercises this particular power, like all its other powers, in its high character, as the legislature of the Union. The American people thought it a necessary power, and they conferred it for their own benefit. Being so conferred, it carries with it all those incidental powers which are necessary to its complete and effectual execution.” See Capital Traction Co. v. Hof, 174 U.S. 1, 5, 19 S.Ct. 580, 43 L.Ed. 873.
In O’Donoghue v. United States, 289 U.S. 516, 539, 53 S.Ct. 740, 746, 77 L.Ed. 1356, the Court quoted with approval from an opinion of Chief Justice Taft, then Circuit Judge, in Grether v. Wright, 6 Cir., 75 F. 742, 756-757, as follows: “ ‘It was meet that so powerful a sovereignty should have a local habitation the character of which it might absolutely control, and the government of which it should not share with the states in whoso territory it exercised but a limited sovereignty, supreme, it is true, in cases where it could he exercised at all, but much restricted in the field of its operation. The object of the grant of exclusive legislation over the district was, therefore, national in the highest sense, and the city organized under the grant became the city, not of a state, not of a district, but of a nation. In the same article which granted the powers of exclusive legislation over its seat of government are conferred all the other great powers which make the nation, including the power to borrow money on the credit of the United States. He would be a strict constructionist, indeed, who should deny to congress the exercise of this latter power in furtherance of that of organizing and maintaining a proper local government at the seat of government. Each is for a national purpose, and the one may be used in aid of the other.’ ”
See Gibbons v. Ogden, 9 Wheat., U.S., 1, 209, 6 L.Ed. 23; Southern R. Co. v. King, 217 U.S. 524, 531, 30 S.Ct. 594, 54 L.Ed. 868; United States Express Co. v. Minnesota, 223 U.S. 335, 342, 32 S.Ct. 211, 56 L.Ed. 459; Pennsylvania Gas Co. v. Public Service Comm., 252 U.S. 23, 29, 40 S.Ct. 279, 64 L.Ed. 434. See also, Sholley, The Negative Implications of the Commerce Clause, 3 U. of Chi.L.Rev. 556, 3 Selected Essays on Const. Law 933.
See Corwin, Congress’s Power to Prohibit Commerce: A Crucial Constitutional Issue, 18 Corn.L.Q. 477.
Capital Traction Co. v. Hof, 174 U.S. 1, 5, 19 S.Ct. 580, 43 L.Ed. 873; Sims v. Rives, 66 App.D.C. 24, 84 F.2d 871, certiorari denied, 298 U.S. 682, 56 S. Ct. 960, 80 L.Ed. 1402.
Gibbons v. District of Columbia, 116 U.S. 404, 407, 6 S.Ct. 427, 429, 29 L.Ed. 680.
O’Donoghue v. United States, 289 U.S. 516, 539, 53 S.Ct. 740, 77 L.Ed. 1856; Washington Loan & Trust Co. v. Allman, 63 App.D.C. 116, 118, 70 F.2d 282, 284, certiorari denied, 292 U.S. 649, 54 S.Ct. 859, 78 L.Ed. 1499.
See O’Donoghue v. United States, 289 U.S. 516, 539, 544-545, 53 S.Ct. 740, 77 L.Ed. 1356. See also, Inter-Island Steam Navigation Co. v. Hawaii, 305 U.S. 306, 314, 59 S.Ct. 202, 83 L.Ed. 189.
Clark Distilling Co. v. Western Maryland R. Co., 242 U.S. 311, 327, 37 S.Ct. 180, 61 L.Ed. 326, L.R.A.1917B, 1218, Ann.Cas.1917B, 845.
Currin v. Wallace, 306 U.S. 1, 14, 59 S.Ct. 379, 386, 83 L.Ed. 441. See Inter-Island Steam Navigation Co. v. Hawaii, 305 U.S. 306, 59 S.Ct. 202, 83 L.Ed. 189; United States ex rel. Attorney General v. Delaware & Hudson Co., 213 U.S. 366, 416-417, 29 S.Ct. 527, 53 L.Ed. 836; District of Columbia v. Brooke, 214 U.S. 138, 149, 29 S.Ct. 560, 53 L.Ed. 941.
Inter-Island Steam Navigation Co. v. Hawaii, 305 U.S. 306, 314, 59 S.Ct. 202, 83 L.Ed. 189; Jefferson v. District of Columbia, 40 App.D.C. 381, 383-384; Sablowsky v. United States, 3 Cir., 101 F.2d 183, 188.
Lack of power in the Continental Congress to regulate commerce permitted “a perpetual course of retaliatory legislation” between neighboring states “tending to the common ruin * * * daily increasing the mass of disaffection, until it became obvious, that the dangers of immediate warfare between some of the States was imminent * * Story, Constitution (1840) § 33. “This was the leading cause of abandoning the Confederation and forming the Constitution, — more than all other causes it led to the result * * Passenger Cases, 7 How., U.S., 283, 445, 12 L.Ed. 702. “If there was any one object riding over every other in the adoption of the constitution, it was to keep the commercial intercourse among the states free from all invidious and partial restraints.” Opinion of Justice Johnson, in Gibbons v. Ogden, 9 Wheat., U.S., 1, 231, 6 L.Ed. 23. See also, Warren, The Making of the Constitution (1928) 567-568; Stern, That Commerce Which Concerns More States Than One, 47 Harv.L.Rev. 1335, 1344 et seq.; The Federalist, Nos. VH, XLH; 1 Story, Commentaries on the Constitution, 4th Ed. by Cooley, 1873, §§ 259, 260 ; 2 id. § 1057; 12 State Government (March 1939) 41-60; Prentice and Egan, The-Commerce Clause of the Federal Constitution (1898) 187 — 196; Bowman v. Chicago & Northwestern R. Co., 125 U. S. 465, 481, 8 S.Ct. 689, 1062, 31 L.Ed. 700; Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511, 522, 55 S.Ct. 497, 79 L.Ed. 1032, 101 A.L.R. 55; Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 256, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944; District of Columbia v. Mt. Vernon Seminary, 69 App.D.C. 251, 100 F.2d 116. Cf. Note, 7 Geo. Wash.L.Rev. 402 (21st amend.).
See Gant v. Oklahoma City, 289 U.S. 98, 102, 53 S.Ct. 530, 77 L.Ed. 1058; Standard Oil Co. v. Marysville, 279 U. S. 582, 584, 49 S.Ct. 430, 73 L.Ed. 856; South Carolina State Highway Dept. v. Barnwell Brothers, Inc., 303 U.S. 177, 190, 191, 58 S.Ct. 510, 82 L.Ed. 734; West Coast Hotel Co. v. Parrish, 300 U.S. 379, 398, 57 S.Ct. 578, 81 L.Ed. 703, 108 A.L.R. 1330; Nebbia v. New York, 291 U.S. 502, 525, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469; Helvering v. Davis, 301 U.S. 619, 640, 57 S.Ct. 904, 81 L.Ed. 1307, 109 A.L.R. 1319; United States v. Jacobs, 306 U.S. 363, 371, 59 S.Ct. 551, 83 L.Ed. 763.
50 Stat. 688, 690.
Heiner v. Donnan, 285 U.S. 312, 326, 52 S.Ct. 358, 361, 76 L.Ed. 772. See also, Brushaber v. Union Pacific R. Co., 240 U.S. 1, 24, 25, 36 S.Ct. 236, 60 L.Ed. 493, L.R.A.1917D, 414, Ann.Cas. 1917B, 713, and Stimson, Retroactive Application of Law — A Problem in Constitutional Law, 38 Mich.L.Rev. 30.
Welch v. Henry, 305 U.S. 134, 146-147, 59 S.Ct. 121, 125, 83 L.Ed. 87. See Billings v. United States, 232 U.S. 261, 282, 34 S.Ct. 421, 58 L.Ed. 596; Milliken v. United States, 283 U.S. 15, 21, 51 S.Ct. 324, 75 L.Ed. 809, and cases there cited; Nichols v. Coolidge, 274 U.S. 531, 47 S.Ct. 710, 71 L.Ed. 1184, 52 A.L.R. 1081; Blodgett v. Holden, 275 U.S. 142, 276 U.S. 594, 48 S.Ct. 105, 72 L.Ed. 206; Untermyer v. Anderson, 276 U.S. 440, 48 S.Ct. 353, 72 L.Ed. 645, with which compare United States v. Hudson, 299 U.S. 498, 57 S.Ct. 309, 81 L.Ed. 370. See generally, Ballard, Retroactive Federal Taxation, 48 Harv. L.Rev. 592. See also, dissenting opinion of Brandéis, ,T., in Untermyer v. Anderson, supra, 276 U.S. at page 446, 48 S.Ct. 353, 72 L.Ed. 645.
274 U.S. 531, 47 S.Ct. 710, 71 L.Ed. 1184, 52 A.L.R. 1081.
276 U.S. 440, 445, 48 S.Ct. 353, 72 L.Ed. 645.
275 U.S. 142, 147, 276 U.S. 594, 48 S.Ct. 105, 72 L.Ed. 206. Statutes purporting to be assertions of the federal taxing power have been held arbitrary and invalid on grounds other than that of retroactivity. Hence Congress, for the purpose of levying a death tax, cannot create a conclusive presumption that all transfers of property made within two years of death of the transferor were made in contemplation of death. Heiner v. Donnan, 285 U.S. 312, 322-326, 52 S.Ct. 358, 76 L.Ed. 772; Handy v. Delaware Trust Co., 285 U.S. 352, 52 S.Ct. 371, 76 L.Ed. 793 (arbitrary and capricious). Cf. Schlesinger v. Wisconsin, 270 U.S. 230, 46 S.Ct. 260, 70 L.Ed. 557, 43 A.L.R. 1224; (holding state statute containing similar provisions violative of the Fourteenth Amendment). Similarly, the courts wiE not sustain as expressions of the taxing power statutes which clearly disclose a purpose, not of raising revenue, but of regulating some activity beyond the legislative power; the levy of the tax being merely a penalty to compel compliance. Bailey v. Drexel Furniture Co., 259 U.S. 20, 39, 42 S.Ct. 449, 66 L.Ed. 817, 21 A.L.R. 1432 (attempt to regulate employment of child labor in local industry and commerce); Hill v. Wallace, 259 U.S. 44, 42 S.Ct. 453, 66 L.Ed. 822 (attempt to regulate conduct of business of local boards of trade); Carter v. Carter Coal Co., 298 U.S. 238, 289, 56 S.Ct. 855, 80 L.Ed. 1160 (regulation of bituminous coal industry) ; United States v. Butler, 297
Sonzinsky v. United States, 300 U. S. 506, 513, 57 S.Ct. 554, 556, 81 L.Ed. 772. See Veazie Bank v. Fenno, 8 Wall., U.S., 533, 548, 19 L.Ed. 482.
See Security Savings & Commercial Bank v. District of Columbia, 51 App. D.C. 316, 279 F. 185; Spreckels Sugar Refining Co. v. McClain, 192 U.S. 397, 411, 24 S.Ct. 376, 48 L.Ed. 496; Baltic Mining Co. v. Massachusetts, 231 U.S. 68, 83, 34 S.Ct. 15, 58 L.Ed. 127; Flint v. Stone Tracy Co., 220 U.S. 107, 146, 150, 31 S.Ct. 342, 55 L.Ed. 389, Ann. Cas.1912B, 1312; United States v. Whitridge, 231 U.S. 144, 34 S.Ct. 24, 58 L.Ed. 159.
See Home Indemnity Co. v. Missouri, 8 Cir., 78 F.2d 391, 394; Reynolds v. United States, 292 U.S. 443, 449, 54 S.Ct. 800, 78 L.Ed. 1353; Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 571, 54 S.Ct. 848, 78 L.Ed. 1425, 92 A.L.R. 794; Cox v. Hart, 260 U.S. 427, 435, 43 S.Ct. 154, 67 L.Ed. 332; Great Northern R. Co. v. Sutherland, 273 U.S. 182, 192, 47 S.Ct. 315, 71 L.Ed. 596; United States v. Bradley, 7 Cir., 83 F.2d 483.
Cox v. Hart, 260 U.S. 427, 434, 43 S.Ct. 154, 67 L.Ed. 332; Big Diamond Mills Co. v. United States, 8 Cir., 51 F.2d 721, 726. See generally, Smead, The Rule Against Retroactive Legislation: A Basic Principle of Jurisprudence, 20 Minn.L.Rev. 775, 778 et seq.
Home Indemnity Co. v. Missouri, 8 Cir., 78 F.2d 391, 394. See also, United States v. Heth, 3 Cranch, U.S., 399, 413, 2 L.Ed. 479; Union Pacific R. Co. v. Laramie Stock Yards Co., 231 U.S. 190, 34 S.Ct. 101, 58 L.Ed. 179; Jones v. Fidelity & Columbia Trust Co., 6 Cir., 73 F.2d 446.
Shwab v. Doyle, 258 U.S. 529, 535, 42 S.Ct. 391, 66 L.Ed. 747, 26 A.L.R. 1454.
Story, J., in Society for Propagation of the Gospel v. Wheeler, Fed.Cas. No. 13,156, 2 Gall. 105, 139. See also, Sturges v. Carter, 114 U.S. 511, 519, 5 S.Ct. 1014, 29 L.Ed. 240; 2 Cooley, Taxation, 4th Ed. 1924, § 513; Gray, Limitations of Taxing Powers, 1906, § 1828: “ * “ * laws which decree consequences or create liabilities, arising out of facts which existed or transactions which took place before the enactment of the laws; and which consequences or liabilities did not by law exist with respect to such facts or transactions, at the times the facts existed or the transactions took place.”
See Locke v. New Orleans, 4 Wall., U.S., 172, 173, 18 L.Ed. 334. goo also, American Mfg. Co. v. St. Louis, 250 U.S. 459, 460, 464, 39 S.Ct. 522, 63 L.Ed. 1084; Bass, Ratcliff & Gretton v. State Tax Comm., 266 U.S. 271, 280, 284, 45 S.Ct. 82, 69 L.Ed. 282.
50 Stat. 688, 690.
282 U.S. 379, 888, 51 S.Ct. 170, 75 L.Ed. 400, 71 A.L.R. 1226.
Regulations for The Administration and Enforcement of Title VI — Tax on Privilege of Doing Business oí The District of Columbia Revenue Act of 1937: Section 3, Effective Date. “Any person engaged in business in the District of Columbia on August 17, 1937, shall be subject to the provisions of said Title and shall be required to pay the tax provided in said Title without any deduction (except an exemption of ?2,000) or proration, notwithstanding such person shall, not have obtained a license, or shall have ceased to engage in business in the District of Columbia at any time during the period from August 17, 1937, to June 30, 1938, unless exempted by the provisions of said Title or these regulations. Any person who was engaged in business in the District of Columbia on August 17, 1937, but who shall cease to engage in such business prior to sixty days thereafter, shall not be required to obtain a license. Persons commencing to engage in business after August 17, 1937, will not be required to pay any tax, but will be required to obtain a Eeense.”
Macallen Co. v. Massachusetts, 279 U.S. 620, 628, 49 S.Ct. 432, 434, 73 L.Ed. 874, 65 A.L.R. 866. Stimson, Retroactive Application of Law — A Problem in Constitutional Law, 38 Mich.L. Rev. 30, 37-38: “The common characteristic of the cases holding the retroactive application of a statute contrary to due process of law is the element of surprise. A person who has changed his position, omitted to change it, or made commitments in reliance upon the law in force at the time is suddenly confronted with a change in the law applicable to his prior conduct, resulting in a liability or loss of investment which he has no opportunity to anlicipate and avoid. On the other hand, in the cases holding the retroactive application of a statute consistent with due process of law, the element of surprise is lacking. There has been no change of position, omission to change or commitment in reliance upon the law in force at the time.”
Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 571, 54 S.Ct. 848, 853, 78 L.Ed. 1425, 82 A.L.R. 794; United States v. Jacobs, 306 U.S. 363, 367, 59 S.Ct. 551, 83 L.Ed. 763; Home Indemnity Co. v. Missouri, 8 Cir., 78 F.2d 391, 394.
266 U.S. 271, 45 S.Ct. 82, 69 L.Ed. 282.
250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084.
50 Stat. 688, 690.
Stewart Dry Goods Co. v. Lewis, 294 U.S. 550, 554, 55 S.Ct. 525, 79 L.Ed. 1054; Quaker City Cab Co. v. Pennsylvania, 277 U.S. 389, 48 S.Ct. 553, 72 L.Ed. 927; General American Tank Car Corp. v. Day, 270 U.S. 367, 46 S.Ct. 234, 70 L.Ed. 635; F. S. Royster Guano Co. v. Virginia, 253 U.S. 412, 40 S.Ct. 560, 64 L.Ed. 989.
Wight v. Davidson, 181 U.S. 371, 384, 21 S.Ct. 616, 621, 45 L.Ed. 900: “It will, therefore, be perceived that there the court below, and this court were dealing wi-tb a question arising under the Fourteenth Amendment of the Constitution of the United States, which, in terms, operates only to control action of the states, and does not purport to extend to authority exercised by the government of the United States.
“In the present case is involved the constitutionality of an act of Congress regulating assessments on property in the District of Columbia, and in respect to which the jurisdiction of Congress, in matters municipal as well, as political, is exclusive, and not controlled■ l y the provisions of the Fourteenth Amendment. No doubt, in the exercise of such legislative powers, Congress is subject to the provisions of the Fifth Amendment to the Constitution of the United
See Lawrence v. Wardell, 9 Cir., 273 F. 405, 408, holding that congressional exactions levied under the power to govern the territories need not be uniform as required by the grant of the general taxing power.
Moses v. United States, 16 App.D.C. 428, 434, 50 L.R.A. 532: “In a State, the citizen, in addition to the safeguards of its own constitution, is under the special protection of the Fourteenth Amendment; in the District of Columbia (in respect of the right here involved) he is under that of the Fifth.”
See Truax v. Corrigan, 257 U.S. 312, 332, 42 S.Ct. 124, 320, 66 L.Ed. 254, 27 A.L.R. 375: “The due process clause, brought down from Magna Char-ta was found in the early state constitutions and later in the Fifth Amendment to the Federal Constitution as a limitation upon the executive, legislative and judicial powers of the Federal Government, while the equality clause docs not appear in the Fifth Amendment and so does not apply to congressional legislation. * * * It [due process], of course, tends to secure equality of law in the sense that it makes a required minimum of protection for every one’s right of life, liberty and property, which the Congress or the legislature may not withhold. Our whole system of law is predicated on the general fundamental principle of equably of application of the law. ‘All men are equal before the law,’ ‘This is a government of laws and not of men,’ ‘No man is above the law,’ are all maxims showing the spirit in which legislatures, executives and courts are expected to make, execute and apply laws. But the framers and adopters of this amendment were not content to depend on a mere minimum secured by the due process clause, or upon the spirit of equality which might not be insisted on by local public opinion.” [Italics supplied]
Steward Machine Co. v. Davis, 301 U.S. 548, 584, 57 S.Ct. 883, 81 L.Ed. 1279, 309 A.L.R. 1293.
See The Federalist, No. XLITI: “The indispensable necessity of complete authority at the scat of government, carries its own evidence with it. It is a power exercised by every legislature of the union, I might say of the world, by virtue of its general supremacy. Without it, not only the public authority might be insulted, and its proceedings be interrupted, with impunity; but a dependence of the members of the general government, on the state, comprehending the seat of the government, for protection in the exercise of their duty, might bring on the national councils an imputation of awe or influence, equally dishonourable to the government, and dissatisfactory to the other members of the confederacy. This consideration has the more weight, as the gradual accumulation of public improvements at the stationary residence of the government, would bo both too great a public pledge to be left in the hands of a single state; and would create so many obstacles to a removal of the government, as still further to abridge its necessary independence. The extent of this federal district, is sufficiently circumscribed, to satisfy every jealousy of an opposite nature. And as it is to be appropriated to this use, with the consent of the state ceding it; as the state will no doubt provide in the compact for the rights, and the consent of the citizens inhabiting it; as the inhabitants will find sufficient inducements of interest, to become willing parties to the cession; as they will have had their voice in the election of the government, which is to exercise authority over them; as a municipal legislature for local purposes, derived
See also, 2 Story, Commentaries on the Constitution, 4th Ed. by Cooley, 1873, § 1219: “* * * It is not improbable, that an occurrence, at the very close of the revolutionary war, had a great effect in introducing this provision [i. e., the clause establishing a seat of government] into the Constitution. At the period alluded to, the Congress, then sitting' at Philadelphia, was surrounded and insulted by a small, but insolent body of mutineers of the continental army. Congress applied to the executive authority of Pennsylvania for defence; but, under the ill-conceived constitution of the State at that time, the executive power was vested in a council consisting of thirteen members; and they possessed or exhibited so little energy, and such apparent intimidation, that Congress indignantly removed to New Jersey, whose inhabitants welcomed them with promises of defending them. Congress remained for some time at Princeton without being again insulted, till, for the sake of greater convenience, they adjourned to Annapolis. The general dissatisfaction with the proceedings of Pennsylvania, and the degrading spectacle of a fugitive Congress, were sufficiently striking to produce this remedy.”
66 App.D.C. 24, 31, 84 F.2d 871, 878, certiorari denied, 298 U.S. 682, 56 S.Ct. 960, 80 L.Ed. 1402.
65 App.D.C. 330, 332, 83 F.2d 587, 589, reversed, 299 U.S. 123, 57 S.Ct. 177, 81 L.Ed. 78.
Parsons v. District of Columbia, 170 U.S. 45, 56, 18 S.Ct. 521, 42 L.Ed. 943; Gibbons v. District of Columbia, 116 U.S. 404, 407, 6 S.Ct. 427, 29 L.Ed. 680; Loughborough v. Blake, 5 Wheat., U.S., 317, 5 L.Ed. 98.
Steward Machine Co. v. Davis, 301 U.S. 548, 584, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A.L.R. 1293; LaBelle Iron Works v. United States, 256 U.S. 377, 392, 41 S.Ct. 528, 65 L.Ed. 998; Currin v. Wallace, 306 U.S. 1, 14, 59 S.Ct. 379, 83 L.Ed. 441.
Steward Machine Co. v. Davis, 301 U.S. 548, 585, 57 S.Ct. 883, 890, 81 L.Ed. 1279, 109 A.L.R. 1293.
District of Columbia v. Brooke, 214 U.S. 138, 150, 29 S.Ct. 560, 563, 53 L.Ed. 941: “However, the question of the power of Congress, broadly considered, to discriminate in its legislation, is not necessary to decide, for, whether such power is expressly or impliedly prohibited, the prohibition cannot be stricter or more extensive than the 14th Amendment is upon the States.”
District of Columbia v. Brooke, 214 U.S. 138, 150, 29 S.Ct. 560, 563, 53 L.Ed. 941. See also, Flint v. Stone Tracy Co., 220 U.S. 107, 158 et seq., 31 S.Ct. 342, 55 L.Ed. 389, Ann.Cas.1912B, 1312; Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 509, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327; Ohio Oil Co. v. Conway, 281 U.S. 146, 159, 50 S.Ct. 310, 74 L.Ed. 775; New York Rapid Transit Corp. v. New York, 303 U.S. 573, 578, 58 S.Ct. 721, 724, 82 L.Ed. 1024: “ ‘The rule of equality permits many practical inequalities.’ ”
Steward Machine Co. v. Davis, 301 U.S. 548, 584, 57 S.Ct. 883, 889, 81 L.Ed. 1279, 109 A.L.R. 1293: “The Fifth Amendment unlike the Fourteenth" has no equal. protection clause. LaBelle Iron Works v. United States, supra; Brushaber v. Union Pacific R. Co., supra, p. 24, [240 U.S. 1, at page 24, 36 S.Ct. 236, 60 L.Ed. 493, L.R.A.1917D, 414, Ann.Cas.1917B, 713], But even the states, though subject to such a clause, are not confined to a formula of rigid uniformity in framing measures of taxation. Swiss Oil Corp. v. Shanks, 273 U.S. 407, 413 [47 S.Ct. 393, 395, 71 L.Ed. 709]. They may tax some kinds of property at one rate, and others at another, and exempt others altogether. Bell’s Gap R. Co. v. Pennsylvania, 134 U.S. 232 [10 S.Ct. 533, 33 L.Ed. 892]; Stebbins v. Riley, 268 U.S. 137, 142 [45 S.Cr. 424, 426, 69 L.Ed. 884, 44 A.L.R. 1454]; Ohio Oil Co. v. Conway, 281 U.S. 146, 150 [50 S.Ct. 310, 74 L.Ed. 775], They may lay an excise on the operations of a particular kind of business, and exempt some other kind of business closely akin thereto. Quong Wing v. Kirkendall, 223 U.S. 59, 62, [32 S.Ct. 192, 56 L.Ed. 350]; American Sugar Refining Co. v. Louisiana, 179 U.S. 89, 94, [21 S.Ct. 43, 45 L.Ed. 102]; Armour Packing Co. v. Lacy, 200 U.S. 226, 235 [26 S.Ct. 232, 50 L.Ed. 451] ; Brown-Forman Co. v. Kentucky, 217 U.S. 563, 573 [30 S.Ct. 578, 54 L.Ed. 883]; Heisler v. Thomas Colliery Co., 260 U.S. 245, 255 [43 S.Ct. 83, 84, 67 L.Ed. 231]; State Board of Tax Com’rs v. Jackson, 283 U.S. 527, 537, 538 [51 S.Ct. 540, 543, 75 L.Ed. 1248, 73 A.L.R. 1464, 75 A.L.R. 1536]. If this latitude of judgment is lawful for the states, it is lawful, a fortiori, in legislation by the Congress, which is subject to restraints less narrow and confining. Quong Wing v. Kirkendall, supra.” See also, Barclay & Co., Inc. v. Edwards, 267 U.S. 442, 450, 45 S.Ct 348, 69 L.Ed. 703; Evans v. Gore, 253 U.S. 245, 256, 40 S.Ct. 550, 64 L.Ed. 887, 11 A.L.R. 519.
See Green v. United States, 25 App. D.C. 549, 553; Rowland v. Dolby & Station, 100 Md. 272, 59 A. 666, 3 Ann. Cas. 643; Sams v. Arthur, 135 S.C. 123, 133 S.E. 205.
Taylor v. Fram, 2 Cir., 252 F. 465; Coverdell v. Erickson, 39 N.D. 579, 168 N.W. 367. See Hansen Service, Inc. v. Lunn, 155 Wash. 182, 192, 283 P. 695, 698-699.
See Singer Sewing Mach. Co. v. Brickell, 233 U.S. 304, 315, 34 S.Ct. 493, 497, 58 L.Ed. 974: “So far as the Fourteenth Amendment is concerned, the argument is confined to the ‘equal protection’ clause. It is said there is no sufficient ground for a distinction, with respect to taxing the occupation, between the business of selling sewing machines from a regularly established store and the business of selling them from a delivery wagon'. But there is an evident difference, in the mode of doing business, between the local tradesman and the itinerant dealer, and we are unable to say that the distinction made between them for purposes of taxation is arbitrarily made. In such matters the states necessarily enjoy a wide range of discretion, and it would require a clear case to justify the courts in striking down a law that is uniformly applicable to all persons pursuing a given occupation, on the ground that persons engaged in other occupations more or less like it ought to be similarly taxed. This is not such a case. Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 559, 562 [22 S.Ct. 431, 46 L.Ed. 679, 689, 690]; Cook v. Marshall County, 196 U.S. 261, 274 [25 S.Ct. 233, 49 L.Ed. 471, 476]; Armour Packing Co. v. Lacy, 200 U.S. 226, 235 [26 S.Ct. 232, 50 L.Ed. 451,
See also, Rast v. Van Deman & Lewis Co., 240 U.S. 342, 357, 36 S.Ct. 370, 374, 60 L.Ed. 679, L.R.A.1917A, 421, Ann.Cas.1917B, 455: “The ground of discrimination, simply and separated from the other attacks upon the statute, does not present much difficulty. The difference' between a business where coupons are used, even regarding their use as a means of advertising, and a business where they are not used, is pronounced. Complainants are at pains to display it. The legislation which regards the difference is not arbitrary within the rulings of the cases. It is established that a distinction in legislation is' not arbitrary, if any state of facts reasonably can be conceived that would sustain it, and the existence of that state of facts at the time the law was enacted must be assumed. Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78 [31 S.Ct. 337, 55 L.Ed. 369, Ann.Cas. 1912C, 160], It makes no difference that the facts may be disputed or their effect opposed by argument and opinion of serious strength. It is not within the competency of the courts to arbitrate in such contrariety. Chicago, Burlington & Quincy R. R. v. McGuire, 219 U. S. 549 [31 S.Ct. 259, 55 L.Ed. 328]; German Alliance Ins. Co. v. Kansas, 233 U.S. 389, 413, 414 [34 S.Ct. 612, 58 L.Ed. 1011, 1022, 1023, L.R.A.1915C, 1189]; Price v. Illinois, 238 U.S. 446, 452 [35 S. Ct. 892, 59 L.Ed. 1400, 1405].”
Lappin v. District of Columbia, 22 App.D.C. 68; Gulf, C. & S. F. R. Co. v. Ellis, 165 U.S. 150, 155, 17 S.Ct. 255, 41 L.Ed. 666.
Clark v. Paul Gray, Inc., 306 U.S. 583, 594, 59 S.Ct. 744, 83 L.Ed. 1001.
State Board of Tax Commissioners of Indiana v. Jackson, 283 U.S. 527, 537-538, 51 S.Ct. 540, 543, 75 L.Ed. 1248, 73 A.L.R. 1464, 75 A.L.R. 1536, and see cases digested on succeeding pages of that opinion. See also, New York Rapid Transit Corp. v. City of New York, 303 U.S. 573, 578, 58 S.Ct. 721, 82 L.Ed. 1024; Metropolitan Casualty Ins. Co. v. Brownell, 294 U.S. 580, 584, 55 S.Ct. 538, 79 L.Ed. 1070; Clark v. Paul Gray, Inc., 306 U.S. 583, 594, 59 S.Ct. 744, 83 L.Ed. 1001. See generally, Sholley, Equal Protection in Tax Legislation, 20 Va.L.Rev. 229, 1 Selected Essays on Const.Law (Book 5) 39, 50.
294 U.S. 550, 55 S.Ct. 525, 79 L.Ed. 1054.
277 U.S. 389, 48 S.Ct. 553, 72 L.Ed. 927.
See Flint v. Stone Tracy Co., 220 U.S. 107, 31 S.Ct. 342, 55 L.Ed. 389,
Reference
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