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New series of numbers.


Washington, D. C., December 29, 1899. To collectors and other officers of internal revenue:

In accordance with decision No. 21871 of the Honorable Secretary of the Treasury, dated December 23, 1899, published in TREASURY DECISIONS, volume 2, No. 26, December 28, 1899, the decisions of the Commissioner of Internal Revenue, commencing with No. 1, volume 3, dated January 4, 1900, will be nunbered from 1, beginning a new series.

G. W. WILSON, Commissioner.

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(2.) Special tax-Wholesale dealer in oleomargarine. Where a person, though not otherwise a dealer in oleomargarine, at the request of another,

orders original manufacturer's packages of oleomargarine, and the manufacturer ships the packages to him and charges them to him, and looks to him only for pay therefor, and he receives these packages and delivers them to the person at whose request he sent such orders, collecting of the latter the purchase money, he must be regarded as having bought the oleomargarine on his own account and as having sold it, therefore, must be regarded as a wholesale dealer in ole

arine and required to pay special tax accordingly, even though he show that he acted solely for the accommodation of the person to whom the oleomargarine was delivered by him, and that he derived no profit therefrom.


Washington, D. C., December 29, 1899. To collectors of internal revenue and others:

The appended decision of the United States district court for the southern district of Illinois is published for the information of all concerned.

G. W. WILSON, Commissioner.


Judd 0. Hartzell v. The United States. ALLEN, W. J., judge:

Judd 0. Hartzell filed his petition November 16, 1895, asking for judgment against the United States for an internal-revenue tax as dealer in oleomargarine, which he alleges was improperly assessed against him. The tax and penalty amounted to $960.


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Petitioner claimed that he had not been a dealer in oleomargarine, and the facts as testified to by the petitioner and by one H. A. Owens, a hotel keeper at La Harpe, Ili., tended to show that Owens had been in the habit of using oleomargarine in wholesale quantities at his hotel, and that the goods, while ordered in Hartzell's name, were for the sole use and benefit of Owens; that Hartzell acted as Owen's agent, and that the purchaser and sellers all so understood the matter.

The proof on behalf of the Government showed that a portion of the goods were purchased by Hartzell from Charles C. Clark, traveling salesman for Reid, Murdock & Co., of Chicago, Ill., and Clark testified that in April, 1893, he visited Hartzell for the purpose of selling him goods ; that Hartzell wanted a tub of oleomargarine, and when informed by Clark that his house did not handle oleomargarine he was requested by Hartzell to ask the house to procure it from some one who did handle it and have it shipped to him. The order went in to Reid, Murdock & Co. in this way on a separate slip of paper, and was by them turned over to Armour & Co., of Chicago, Ill., which latter company shipped the oleomargarine to Hartzell. Clark further iestified that he was acquainted with Owens that kept the hotel in La Harpe; that he never sold him any oleomargarine and never took any order from him for such goods; that Hartzell asked him whether any license was required for handling oleomargarine, and Clark told him there was such requirement, bnt that he was not posted and would be no authority on that subject.

Another portion of the goods involved in the transaction appears to have been parchased by the petitioner from C. H. Pierce, traveling salesman for the Armour Packing Company, of Peoria, Ill.

Pierce testified that he called on the petitioner about every two weeks during the year 1893, and on one or two occasions sold him oleomargarine in 40-pound lots; that he knew Owens, who kept the hotel, and never at any time sold him any oleomargarine.

The inevitable conclusion from the evidence is that the sales of oleomargarine for which this tax and penalty were collected from the petitioner as a wholesale dealer were made to the petitioner, and not to Owens, and that the petitioner in buying bought on his own account, and not as the agent of Owens or any other person.

On a demarrer to the original petition filed in this case, I had occasion to file an opinion as to the questions of law arising on the pleadings December 24, 1897, overruling the demurrer and holding that petitioner had a cause of action against the Government, if the facts could be proven as stated in his petition ; but on the trial before me the evidence failed to sustain the substantial averments of the petition and a verdict was rendered for the Government and judgment on the verdict followed.

(3.) Stamp tax--Orders for the payment of money. Orders for the payment of money are required to be stamped, although intended merely

as receipts or vouchers.—The drawer of the order is liable for the stamp, but, besides this, the maker, or party for whose use or benefit the order shall be made, signed, or issued, is liable also.


Washington, D. C., December 30, 1899. To collectors of internal revenue and others :

The appended decision of the United States circuit court, district of South Carolina, is published for the information of all concerned.

G. W. WILSON, Commissioner.



Granby Mercantile Company v. E. A. Webster, as collector of internal revenue for the district

of South Carolina.

The question presented in this case, lýing as it does in a very narrow compass, is nevertheless important.

The Granby Mercantile Company had an understanding with the Granby Mills, whether put into formal contract or not does not appear. Under this contract or understanding the mercantile company sold goods to the operatives of the mills on credit. When the accounts for such sales were presented to the treasurer of the mills they were paid out of the moneys due to the operatives making them, for wages in the mills, the mercantile company guarantying the mills company the correctness of the several accounts. To protect itself and as vouchers for each transaction, the mercantile company at each sale took from the purchaser an order in this form :

COLUMBIA, S. C., GRANBY COTTON MILLs pay to the Granby Mercantile Company dollars

cents, for iny account. Witness :

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The Grauby Mercantile Company never presented these orders to the mills, but filed them away as vouchers, probably to be presented in case the maker disputed the account.

The collector of internal revenue, discovering this mode of dealing, called upon the Granby Mercantile Company to affix the 2-cent revenue stamp npon each of these orders. He insisted upon this demand, and the Commissioner of Internal Revenue, upon an appeal to him, sustained the decision of the collector. The mercantile company paid the demand, 2 cents upon 15,847 orders, in all $316.94, and now brings suit for its repayment. (Section 3226, Revised Statutes of the United States.)

The collector proceeded under section 6 of the act of Congress approved June 13, 1898, entitled “An Act to provide ways and means to meet war expenditures, and for other purposes,” passed in second session, Fifty-fifth Congress. The section is in these words:

“That on and after the first day of July, eighteen hundred and ninety-eight, there shall be levied, collected, and paid, for and in respect of the several bonds, debentures, or certificates of stock and of indebtedness, and other documents, instruments, matters, and things mentioned and described in Schedule A of this Act, or for or in respect of the vellum, parchment, or paper upon which such instruments, matters, or things, or any of then, shall be written or printed by any person or persons, or party who shall make, sign, or issue the same, or for whose use or benefit the same shall be made, signed, or issued, the several taxes or sums of money set down in figures against the same, respectively, or otherwise specified or set forth in the said schedule."

Schedule A, referred to in this section, requires a stamp of 2 cents on Bank check, draft, or certificate of deposit pot drawing interest, or order for the payment of any sum of money, drawn upon or issued by any bank, trust company, or any person or persons, companies, or corporations at sight or on demand.”

The collector requires a stamp upon instruments referred to in the case at bar because they are orders for the payment of money. There can be no doubt that they are orders for the payment of money and nothing else. The language used can have no other interpretation. The plaintiff, however, says that whatever may be their form, they were not intended for presentation, were never in fact presented but were taken, kept, and filed by the mercantile company as vouchers for each sale.


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The case of United States v. Isham (17 Wall., 496) says:

“The liability of an instrument to a stamp, as well as the amount of such duty, is determined by the form and face of the instrument, and can not be affected by proof of facts outside the instrument itself."

And this rule commends itself. Were it necessary to inquire into all the circumstances attending the execution of an order for the payment of money, before it can be ascertained whether it be liable to the stamp tax, endless delay would be occasioned. The purpose of the tax-the prompt relief of the Treasury-would be defeated.

The important question, however, is this: Who is liable for the stamp? The drawer of the order unquestionably is. He comes within the words of the act, being the person “who makes, signs, or issues” the order. But, beside this, the payment must be made by the maker or by the party “for whose use or benefit the order shall be made, signed, or issued."

In the case at bar, “for whose use or benefit?? were these orders made or signed or issued? The transaction is this: The operative makes the purchase. He can not, or does not desire to, pay cash. But the mercantile company is unwilling, or at least does not intend, to rely on the personal credit of the operative. It takes from him an order on the mills company payable out of the account of the operative with the mill company. That is the security which the mercantile company takes, and it is taken for its benefit. Whether it be presented then, or is kept for presentation at some time in the future if needea, or whether it he retained simply as a voucher, a verification of the account, it is taken for the use of the mercantile company. So that company comes within the words of the statute. It can not be said that these words, “or for whose use or benefit the same shall be made, signed, or issued,” apply to the drawer of the order. If this were so, the words quoted would be entirely superfluous, mere surplusage, nor would the disjunctive “or” have been used to connect these words with the words preceding.

This seems conclusive of the question. Let an order be taken dismissing the complaint.

CHARLES H. SIMONTON, Circuit Judge. DECEMBER 27, 1899.

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(4.) Special tax--Physician-- Retail liquor dealer. A physician who prescribes and sells to his patients whisky, brandy, wine, or any other

alcoholic liquor that is not compounded into a medicine by the admixture of any drug or 'medicinal ingredient therewith is required to pay special tax as a retail liquor dealer, even though the alcoholic liquor thus furnished be prescribed as a medicine only and so used.


Washington, D. O., January 3, 1900. SIR: Your letter of the 27th ultimo has been received, concerning Dr. W. M. Sivey, a druggist and physician at Tunnelton, W. Va., who “keeps a small drug store in order to furnish medicines for his patients," and "sometimes prescribes stimulants for fever patients and in various diseases, and furnishes it only ppon his prescription as a physician."

You may inform Dr. Sivey that he can not prescribe whisky, brandy, wine, or any other alcoholic liquor, and furnish it to his patients under conditions constituting sale of it, even though it is for medicinal use only, without subjecting hinuself to special tax as a retail liquor dealer under the internal revenue laws of the United States.

A physician who compounds his own medicines is eutitled to the same exemption from special tax as an apothecary under the provisions of section 3216, Revised Statntes-that is, he may keep spirits, wine, etc., on hand and use them in combination with drugs or medicinal ingredients in the preparation or making up of his medicines, and may sell such medicines, without paying special tax as a liquor dealer. The exemption does not extend to the sale of alcoholic liquor not thus compounded into medicines by any doctor or druggist. Respectfully,

G. W. WILSON, Commissioner. Mr. A. B. WHITE, Collector Internal Revenue, Parkersburg, W. Va.


Special tax— Pharmaceutical stills. The manufacturer of a still that is to be used only for pharmaceutical purposes, or for

distillation of volatile oils, is not required to pay special tax thereon, provided he furnish to the collector evidence uuder oath setting forth the purpose for which the still is to be used.


Washington, D. C., January 5, 1900. SIR: In reply to your inquiry of the 20th ultimo, you are hereby informed that the manufacturer of a still that, as you state, is “to be used only for pharmaceutical purposes” or for “the distillation of volatile oils only, such as peppermint, lavender, etc.,'' is not required to pay special tax thereon, nor special tax as a manufacturer of stills, provided that he furnish to the collector of the district evidence under oath setting forth the purposes for which the still is to be used, and that it is not to be used for the distillation of ethyl alcohol. See the settled ruling on this subject as published in volume 36, Internal Revenue Record, on page 285.

* But every still must, immediately upon being set up, be registered with the collector in strict compliance with the provisions of section 3258, Revised Statutes. Respectfully,

G. W. WILSON, Commissioner. Dr. A. W. THORNTON, Ferndale, Pash.



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