The United States Corporation Tax Act of igog change the nature of the tax if it is in fact direct.18 The following taxes have been held to be duties, imposts and excises and not direct taxes within the meaning of the Constitution: a tax on the use of carriages19; on manufactured tobacco20; on sales of property at exchanges and boards of trade,21 and of shares of cor porate stock22; on the circulation of state banks,23 and on the business of insurance24 and sugar refining25 com panies; an inheritance or succession tax26 and a tax upon individual incomes.27 It would seem to follow from these cases that the distinction between an excise and a direct tax is based upon the theory that while the former is a tax upon a particular commodity, the transaction of a particular business, or the exercise of a particular right or privilege,28 the latter is a tax upon property and income generally, imposed merely because of ownership. So in the case of Pattern v. Brady29 a I8See Knowlton v. Moore, 178 U. S. 41, 81. A stamp tax on a foreign bill of lading is in sub stance a tax on the property covered by the bill of lading and therefore a tax or duty on exports, under Art. I., Sec. 9, cl. 5 of the Constitution Fairbank v. United States, 181 U. S. 283. A state tax on the shares of stock of savings banks and loan and trust companies, based on the capital, surplus and undivided earnings of the companies, and assessed to the companies and not to the individual stockholders, is a tax upon the property of the companies, and is therefore invalid so far as it affects United States bonds in which the capital is invested. Home Savings Bank v. Des Moines, 205 U. S. 503: "The slight concealment afforded by the omission of the property eo nomine is not sufficient to disguise the fact that in effect it is the property which is taxed." Cf. Delaware, Lackawanna & Western R. R. Co. v. Pennsylvania, 198 U. S. 341; Powers v. Detroit & Grand Haven Ry. Co., 201 U. S. 543. "Hylton v.v. Brady, United 184 States, 'opatton U. 3S. Dall. 608. (U. S.) 171. "Nichol v. Ames, 173 U. S. 509. "Treat v. White, 181 U. S. 264; Thomas v. United States, 192 U. S. 363. 23 Veazie Bank v. Fenno, 8 Wall. (U. S.) 533. "Pacific Insurance Co. v. Soule, 7 Wall. (U. S.) 433. "Spreckels Sugar Refining Co. v. McClain, 192 U. S. 397. "Scholey v. Rew, 23 Wall. (U. S.) 33 1; Knowlton v. Moore, 178 U. S. 41; Murdock v. Ward, 178 U. S. 139. "Springer v. United States, 102 U. S. 586. See in regard to this case 157 U. S. p. 578. "See Thomas v. United States, 192 U. S. 363, 370. M184 U. S. 608.
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tax on tobacco and snuff "however pre pared, manufactured and sold, for con sumption or sale," was held to be "not a tax upon property as such, but upon certain kinds of property, having refer ence to their origin and their intended use"30 and therefore an excise. So also in the Spreckels case31 the tax was not upon the gross earnings of the com pany, but upon the business of sugar refining; in Pacific Insurance Company v. Soule32 upon the business of insurance; and in Veazie Bank v. Fenno33 upon the circulation of state banks. On the other hand, the tax condemned in the Income Tax cases was levied upon incomes generally, and this seems to have been the real ground upon which it was held to be direct by the majority of the court. The court regarded "a tax upon property holders in respect of their estates, whether real or personal or of the income yielded by such estates" as direct34 and held that this was the sense in which the term was intended to be used in the Constitution. On the rehearing the court said: "Whatever the speculative views of political economists or revenue reformers may be, can it be properly held that the Constitution . . . authorizes a general unapportioned tax on the products of the farm and the rents of real estate, although imposed merely because of ownership and with no possible means of escape from pay ment, as belonging to a totally different class from that which includes the prop erty from whence the income proceeds? There can be but one answer, unless the constitutional restriction is to be treated as utterly illusory and futile, and the object of the framers defeated."36 This is also the view adopted in the later 30Id., p. 619. "Supra. "7 (U. S.) S.) 533. 433. M8 Wall. Wall. (U. "157 U. S., p. 558. "158 U. S., pp. 627, 628.
