George Howard Earle, Jr.

“ To tax excess profits is no wiser than it would be in a siege to draw troops for the reinforcement of a weak point, from still weaker points, or to stop circulation to the least nourished part of the body. But it is astounding, with all these conditions before our eyes, that even a far greater evil is actually being contended for; that the very life blood of the economic body of the community is to be sucked from it by a construction that will make capital, and its natural and slow variation through the years, subject to a still greater and more disastrous spoliation. ”

“ If the Government in such case could consider these gradual accretions to be "Income" and could tax them and the Capital on which they accrue under the pretense that they constituted "Income," must not an absolutely final exhaustion, not merely of the resources of the public, but of the Government itself, become inevitable? Taxation then might not merely be the power to destroy, but be destruction itself. ”

“ Forever now, political pressure will be brought upon the Congress, to advance prices by depreciating the currency; forever will conflict continue between those wanting indirect relief from debt, and those wanting honest payment; forever must the commercial interests of the nation be liable to be suddenly converted into the wildest gamble, with the certain results of either ruin, or disturbing charges of alleged "profiteering"; forever must our wars cost us at least double; forever must the Supreme Court be burdened with an irritating and dangerous conflict, dangerous to it and to all! ”

“ Where, it may be asked, is our clear consent, that any taxing officer can destroy the fundamental liberty, by calling what the Supreme Court has maintained for half a century to be Capital, and Capital only;—what it never in all history has been, that is the entirely different thing called "Income"? ”

“ The Preamble to the Constitution shows that the Fathers had in mind and intention the loss of the blessings of Liberty.
To those who love Liberty, can anything be finer? A splendid tribunal, without regard to the possible individual theories of those who may from time to time constitute it, nevertheless, as honorable men, bound to seek that interpretation of every word, every line, that will safeguard our freedom, and containing a clear definition of the most essential things for the preservation of our Liberty. ”

“ But the Supreme Court is not an ordinary Court. On the contrary, as the greatest creation of the Fathers, it has a far higher and nobler purpose,—that is, the preservation of American Liberty; the Justices constitute the sworn guardians of the last defense of Freedom; and as their high function, necessarily, requires knowledge of economics and statesmanship, these become the very vitals of proper solution, where Liberty is in question. And Liberty is always in question, where a taking of property without consent is involved. ”

“ What is unfortunate is that ignorant, thoughtless, reckless lawmakers rode at a hard gallop through the Constitution of the United States, so incapable of doing what needed to be done, so heedless of whither they were headed, that a unanimous Supreme Court, Conservatives, Liberals, and Radicals all together, condemn their performance as illegal and insufferable. ”

“ Indeed, all the Anglo-America Civil Wars have turned chiefly upon this paramount matter; for it must not be forgotten that the same principle which underlies these taxes is involved in the decisions relating to restraints of trade and monopolies. Monopolies have always been denounced as "odious" and "pernicious," because they create a power of taxation without consent, whether it be for the benefit of such governments as the Tudors and Stuarts attempted to erect,—or, what is even worse, that of private individuals seeking to this extent to enslave their fellows. ”

“ There can be no greater justification of the care with which our forefathers fortified us against similar danger than the fact that Englishmen, having thus safeguarded their own freedom, having thus not merely fought for, but died for the principle involved, could, in less than a century, themselves attempt, by similar method, to destroy that of their fellow-subjects, living at a distance, in the Colonies, even though of identical blood and tradition; not, however, without vigorous protest from their own greatest men who really understood how important and of what Liberty consisted. ”

“ And so the Sixteenth Amendment completely fails to establish the clarity of consent, necessary to let us continue freemen, except regarding but one phase of the matter, "income" alone. It not only does not grant but absolutely negatives any further power. We know how modern amendments to the Constitution have been made. We cannot possibly know how Congress and the Legislatures came to let down the bars in a matter that the Constitution still admittedly declares dangerous to American Liberty, as a general principle. ”

“ Are we no longer to be taxed by the clear mandate of our proper representatives, but by a substitute of clearly distinguished and conflicting words, inserted by the executive branch of our Government? That must be impossible, if we are to remain free, and, as keeping us so is the great privilege of the Supreme Court we should have no further cause for anxiety concerning the destruction of constitutional guarantees through such abuses of the power of taxation. ”

“ No one has or will contend that the Supreme Court fell into error when it declared that: "Except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes" are not repealed or modified, as "this limitation has still an appropriate and important function, and is not to be overridden by Congress, or disregarded by the Courts." No one need doubt that this function was to prevent ultimate discord in our own country, that from the similar danger of too distant power of consent, had already rended in twain the British Empire. ”

“ The taxing power, disregarding the decisions of the Supreme Courts, not only of the United States, but of all the States, burdens the people by unwarranted taxes, on the theory that "Income," at least, may be construed to be identical with the "Capital" from which it issues. If a false situation thus created can be used to change the fundamental meaning of the Constitution; if the Tax Collector can thus benefit by his own wrong, and place the unjust burdens of his errors upon the shoulders of people entitled to be free, there would seem to be little benefit in Constitutional protection at all. ”

“ It was upon this argument that in the next year the Constitution was adopted, and this prediction held true through all the difficulties of our subsequent wars and throughout the following generations until the Supreme Court reversed itself in the later Legal Tender decisions, which were obtained in the manner familiar to all, opening forever a perfect Pandora's box of dangerous and unceasing evils to our country; and not the least of these, to the Supreme Court of the United States itself, the supreme and most important invention of the Constitution. ”

“ Assume that a man has invested his capital in a certain business or productive property: The Government, then, so inflates its currency that he must get, and can get, two dollars (now worth really fifty cents apiece) , in the place of the one hundred cent dollar which before really measured the value of his property. A change of investment becomes desirable from all points of view; but he cannot make it, if, perhaps, half of his capital investment can be wrested from him, so that he can only replace his present capital investment with one of half the productive and real value. ”

“ This is inseparably essential to the freedom of a people, and the undoubted right of Englishmen—that no taxes be imposed upon them, but with their own consent. * * * That all supplies to the Crown, being free gifts from the people, it is unreasonable and inconsistent with principles and spirit of the British Constitution for the people of Great Britain to grant to his Majesty the property of the Colonists."
Of course, as Lord Chatham so accurately pointed out: "The idea of virtual representation of America in this House, is the most contemptible idea that ever entered into the head of man. ”

“ If the Government is not content plainly to ask specifically what consent is desired, that of iself is strongest reason to be on guard!
When we consider the matter from the viewpoint of the surviving Liberty that still abides with us in the unrepealed provisions of the original Constitution, the solution becomes overwhelmingly clear, for by History, Common Law and Constitution, they deeply involve our Liberty, and must be safeguarded against everything. We should thank our Creator that we have a Supreme Court that has never faltered in such cases. ”

“ We have learned, however, from the Supreme Court how such statutes must be construed. And it has told us why. It cannot too often be said we were slaves, were a real consent, our real consent, not thus required. The vital thing is that we must not be enslaved by interpretation that admits of doubt. The taxing power always has, if the people really approve, the full power of clear statement, and there is, therefore, no pretext for "paltering with us in a double sense" in so vital a matter. ”

“ It most certainly follows that provisions which inhibit men from transfering capital from one capital use to another, as the exigencies of business may require, leaving, of course, the enlargement of income that thus becomes available for Governmental purposes, must strongly tend not only to impoverishment of the community, but to the depletion of Governmental resources. No man of large business activity can honestly fail to testify to innumerable cases where both the National wealth and the Government's revenue have suffered from this very cause. ”

“ But we do know that the fundamental principle has only been relaxed as to this single thing called "Income." And thus we have a situation where, both positively and negatively, and from every point of view, whether we consider the subsisting principles of the Constitution or the Amendment itself, that can, alone, bring us to but a single result.
"Income" cannot by any possibility be stretched one iota beyond what "Income" has always clearly and generally been understood to be; if there be doubt, it must be construed in protection of the citizen ”

“ The Supreme Court has well instructed us: That this question as well as all others "which run along the line of the extent of the protection the individual has under the Constitution against the demands of the Government is of importance; for in any society the fullness and sufficiency of the securities which surround the individual in the use and enjoyment of his property constitute one of the most certain tests of the character and value of the government." ”

“ But the solution found proved as simple as it was effective. Indirect taxation need not be feared, as had been proven by the failure of the British attempts, it being under the control of all citizens combining to abstain from the use of the taxed articles; but, which with a great and free people, would afford ample revenue not only to make the government rich, but dangerously rich, for enormous revenue is inevitably a temptation to corruption, and dangerous and even despicable measures to obtain control of it. ”

“ It is, therefore, absolutely essential that there should be an adequate increase of the amount and efficiency of the capital item requisite to additional employment and production. It is obvious that this may be increased from its own slow growth and accretion in the course of industry; and that for a higher degree of prosperity there must be even additional savings from available fruits or income. People have thus already learned how pernicious excess profit taxes are, and are unanimously seeking their abandonment. ”

“ Nothing could be more unfortunate than the growing tendency of the Government during that period to meet every difficulty, no matter how temporary or self-remedying, by legislation, which, if sustained, would nullify permanently the most vital of those Constitutional rights, of which the Supreme Court continues the ever faithful and sworn defender. ”

“ Assuming that by Governmental edict, and the general forgetfulness that inflation always creates illusory estimates of value, it happens that a man having an orchard, or a farm, or mill, or invested capital of any kind, suddenly is led to believe that it has increased, through misleading inflation, perhaps, to three hundred per cent. ”

“ Are Americans hereafter, instead of being ruled by the doctrines prevailing even in Great Britain, to face the fact that henceforth, where the Legislatures, with their full powers are not pleased to be explicit and clear, the rule is to be, not that vagueness is not to continue to be "so much the worse for the Crown," but so much the worse for the people and their constitutionally-protected freedom? ”

“ But who can say, by mere surmise or guesswork, that they would think it either patriotic or for the welfare of their country that their orchards should be taken or destroyed in whole or in part by consent controlled by those too far away, particularly if they had grown more valuable through course of time, and were so yielding the larger and the more permanent fruits necessary for the continued supply and preservation of their country? ”