with the Constitution.  In the action brought to test the question[1] it appeared that the income on which Mr. Springer had been taxed was derived in part from the practice of his profession as an attorney.  To this extent it was clearly an excise or duty, i.e., an indirect tax.  As it was incumbent upon Mr. Springer, by reason of the form of the action, to demonstrate that the tax was void in toto the Court could not do otherwise than decide against him.  In rendering its decision, however, the Court took occasion to discuss the question as to what were direct taxes within the meaning of the Constitution, and expressed the view that the term included only capitation or poll taxes, and taxes on real estate.  There the matter rested until the year 1894 when Congress enacted another income tax law.  This time the argument from necessity was lacking.  The country was in a state of profound peace.  Opposition to the tax among the moneyed interests was widespread.  Test suits were brought and after most elaborate and exhaustive argument and reargument the Hylton and Springer cases were distinguished and the act was held unconstitutional.[2] The decision was by a closely divided Court (five to four), the majority finally holding that “direct taxes” within the meaning of the Constitution included taxes on personal property and the income of personal property, as well as taxes on real estate and the rents or income of real estate.  This conclusion was fatal to the act.  It was conceded that the tax, in so far as it affected income derived from a business or profession, was an indirect tax and therefore valid without apportionment among the states, but the provisions for taxing the income of real and personal property were held to be an essential part of the taxing scheme invalidating the whole statute.

[Footnote 1:  Springer v.  United States, 102 U.S., 586.]

[Footnote 2:  Pollock v.  Farmers Loan & Trust Co., 157 U.S., 429; same case on rehearing, 158 U.S., 601.]

This momentous decision was almost as unpopular with Congress and the general public as the decision in Chisholm v.  Georgia had been a hundred years earlier.  Many legislators were in favor of enacting another income tax law forthwith and endeavoring to coerce the Court, through the force of legislative and popular opinion, to overrule its decision.  Calmer counsels prevailed, however, and plans were initiated to get over the difficulty by a constitutional amendment.  Meanwhile, steps were taken to eke out the national revenue by various excise taxes, notably the so-called Federal Corporation Tax.  This novel tax, which was thought by many to involve a very serious encroachment by the Federal Government on the powers of the states, will be discussed more at length in later chapters.[1]

[Footnote 1:  See Chapters X and XI, infra.]

The constitutional amendment as proposed by Congress and ratified by the states provided: