Part 11

As is well known to all lawyers, a restraining or injunction order is never granted by a state or federal court in New York without notice to the defendants except when proof is submitted to the judge by affidavit or verified complaint which shows that, unless the defendant be immediately enjoined, irreparable loss or damage will result to the applicant before the matter can be heard on notice. If the court has sworn proof thus submitted to it that the defendants are threatening immediate injury to person or destruction of property, it is the duty of the judge--and may it ever be the duty of every American judge--to issue an injunction without delay, for delay in such a case would in most instances work a complete denial of justice.

If our system of equal laws impartially administered is to endure, the courts must continue to shield and protect the individual by means of injunction orders, and they should not be deprived of the power of exercising one of the most beneficent remedies afforded by any system of laws and one indispensable to the due and satisfactory administration of distributive and equal justice.

Some typical examples of misrepresentation of our courts by leaders of public opinion will be recalled in connection with the Tenement House Tobacco case, the Bakers case, the Ives case, and other cases involving so-called social legislation.[57]

When Mr. Roosevelt's statements in regard to the Tenement House case were recently challenged by four lawyers, including Senator Root, Mr. Milburn and Mr. Marshall, as being inaccurate and likely to mislead the voters of the state, he made no correction whatever, but urged the people to accept his statements and those of a settlement worker instead of the record of the case before the Court of Appeals. This incident will serve to show the difficulty of combating such inaccurate statements, which are given the utmost publicity by the press throughout the country, whereas the refutation is generally ignored. A report of Mr. Roosevelt's public comments, when his attention was called to his manifestly incorrect statement of the decision in the Tenement House case, quotes him as saying:

"I am informed that these four gentlemen attacked the statements as being contrary to both the facts and the law. The first was the case of the tenement-house cigar manufacturers. Now I will read to you what is said by one of the women who knows the conditions of tenement-house life as few other women, and as hardly any man, knows them, by Florence Kelly in a book called 'Some Ethical Gains through Legislation,' and I cordially commend to Mr. Root and his associates who signed his protest to study that book and to ponder what is meant by the word 'ethical' in connection with legislation. Of the Jacobs case, to which I referred, Mrs. Kelly says: 'To the decision of the Court of Appeals in the case In re Jacobs is directly due the continuance of the tenement manufacture and of the sweating system in the United States and its present prevalence in New York.' That is the statement of a woman who, as regards knowledge of tenement-house conditions, knows so much more than those four great corporation lawyers that her little finger is thicker than their loins when you come to study what they know and what she knows of the subject of which they have ignorantly presumed to speak."

And yet all that these lawyers did was to point out the inaccuracy of Mr. Roosevelt's statements as to what the courts had held, and to suggest that this inaccuracy would be demonstrated by reference to the records of the courts, which are open to all who care to take the trouble to ascertain the truth.

It should be recalled in connection with any fair and candid consideration of the Tenement House case that the constitutional convention of 1894 had ample opportunity to change the rule in that case if it had then been thought to interfere with the attainment of "social justice." Although the subject was called to the attention of the convention, it was deemed advisable to make no change. The rule is reasonable and well-settled in the interpretation of constitutions and it was well known to the distinguished members of that convention that "where a clause or provision in a constitution, which has received a settled judicial construction, is adopted in the same words by the framers of another constitution, it will be presumed that the construction thereof was likewise adopted."

Another judicial decision denounced by Mr. Roosevelt a few days before the last election is the Knisley case discussed above. Speaking of this case, he told his audience, and through the press told the whole country, that "the Court of Appeals threw out the case and declared the law unconstitutional on this ground: that the legislature could not interfere with the liberty of that girl in losing her arm.... The trouble was that they knew law but didn't know right, and still more, as I have stated, that they had arrogated to themselves the right that the people should have--the right to decide what the common sense and justice of the people demand." Yet there was not one word anywhere in the record or in the opinion of the Court of Appeals which suggested that the act was unconstitutional or that the legislature did not have full power to change the common law rule in such cases and make the employer liable to his injured workmen or workwomen if he failed to comply with a statute prescribing guards or other protection for employees. The most superficial investigation would have disclosed the fact that the Court of Appeals has never intimated in any case that such a statute would be unconstitutional, and that in the Knisley case it neither had before it nor decided any question concerning the constitutionality of an act of the legislature.

Shortly before the election, Mr. Roosevelt caused to be published in the "Saturday Evening Post" of Philadelphia, under the title of "The Deceitful Red Herring," the following statement: "Our platform demands an eight-hour law for women in industries.... But the Court of Appeals of New York has said that the ten millions of people of my state have not got that right if they wish to exercise it. In New York the people did not ask for an eight-hour day--asked for only a ten-hour day for women. Then the Court of Appeals said that under their interpretation of the Constitution the small sweat-shop keeper or the big factory owner may work haggard women twelve, fourteen or sixteen hours a day, if he chooses, and we cannot stop it."

As a matter of fact, however, as the slightest investigation would have disclosed, the New York Court of Appeals had never decided anything of the kind. Moreover, there was in our state when Mr. Roosevelt published this statement a statute limiting the hours of labor for women to nine hours per day and fifty-four hours per week,[58] and for thirteen years prior to the recent amendment there had been a statute limiting the hours of labor of women to ten hours per day and sixty hours per week. These statutes had been regularly enforced for years, and their constitutionality had never been even questioned, so far as I have been able to ascertain.

Immediately after the publication of this article in the "Saturday Evening Post," a communication was addressed to the publisher by a well-known and reputable member of the New York bar, Mr. Alfred E. Ommen, pointing out the misstatement in regard to the Court of Appeals and conclusively showing its error; but this important periodical, with perhaps the largest circulation of any American weekly, saw fit to leave uncorrected this untrue and grossly misleading statement, and it has not yet withdrawn it, and probably never will do so.

Such is the tenor of the criticisms of the courts to be found in public speeches and in all forms of publication. They find constant repetition in the press, and carry the authority of distinguished leaders of public opinion and of men who at the present time have the ear and the confidence of the people. The statements of such men are naturally accepted as accurate and true. Who would believe it possible that any such statements as the above could be made by an ex-President of the United States unless they were true? As the draft of this report is being revised, an advertisement proclaims a renewal by Mr. Roosevelt of his attack on the courts, and a new assailant and critic appears in the person of Mr. William Randolph Hearst, who seems desirous to emulate Mr. Roosevelt in his abuse of the courts. The press at large continues to give the fullest publicity to all attacks on the courts and little or no space to any refutation of them. The judges are being misrepresented and assailed on all sides. They cannot defend themselves. The bar at large so far has seemed indifferent; and in the great forum of public opinion judgment is going by default.

If these misleading criticisms are not refuted, and the courts are not defended, they may bend before the storm of undeserved censure and the clamor of the crowd. There is grave danger that the judges will be unconsciously intimidated and coerced by this abuse. Indeed, some recent decisions are ominous. Is it not then fit and proper that the members of our profession should charge themselves specially with the task of defending the courts and placing the facts before the people? The bar associations of the country will never be called upon to render a greater service to the profession and to the community at large than that of stemming this tide of misrepresentation and intemperate abuse, and of restoring confidence in the learning, impartiality and independence of our judges, in the justice of their decisions, and in the necessity of their enforcing constitutional restraints.

FOOTNOTES:

[Footnote 50: Read as a supplement to the report of a committee appointed by the New York State Bar Association submitted at the thirty-sixth annual meeting of the Association held at Utica, January 24, 1913.]

[Footnote 51: 148 New York Reports, p. 372.]

[Footnote 52: 206 New York Reports, p. 355.]

[Footnote 53: 153 N.Y. Appellate Division Reports, p. 674.]

[Footnote 54: 206 New York Reports, p. 162.]

[Footnote 55: 154 New York Reports, p. 355; 117 N.Y. Appellate Division Reports, p. 40; and 191 New York Reports, p. 528.]

[Footnote 56: 158 United States Reports, p. 564.]

[Footnote 57: See discussion _supra_, pp. 48-70.]

[Footnote 58: See the New York Labor Law, sec. 77.]

GRADUATED OR PROGRESSIVE TAXATION[59]

The recent message of the President to the Congress has strikingly brought to the attention of the American public the subject of graduated or progressive taxation upon inheritances and incomes. Acting upon the suggestions contained in the message, bills providing for such taxes have already been introduced in the House of Representatives. Amendments to the Constitution have also been proposed, one of which is to authorize Congress to tax inheritances amounting to or exceeding $50,000 and to levy an income tax without apportionment. The pending bills provide that successions of $10,000 and under and incomes of $4,000 and under are to be wholly exempted from the proposed taxes. The proposed graduated scales are to run from three-quarters of one per cent. on inheritances or successions over $10,000 and not exceeding $25,000 up to twenty-five per cent. on inheritances or successions exceeding $30,000,000, and from two per cent. on incomes exceeding $4,000 per annum and not exceeding $8,000 up to six per cent. on all incomes over $64,000. It is also suggested that Congress by means of such taxes should seek, not merely to raise revenue for the support of the national government, but also to solve social problems by breaking up fortunes assumed to be swollen to an unhealthy size and thus bring about a redistribution of wealth.

In considering these proposed measures, it should be borne in mind that, if they or any similar propositions become laws, the result will be--and such undoubtedly is the intention--to exempt the majority of property owners from this form of taxation and to cast the burden upon a very small minority. It should also be realized that this proposed progressive taxation, particularly as to inheritances, is conceded to be only a first step, and that increases in the scale of progression are contemplated and will certainly follow. Indeed, the President declares that "at first a permanent national inheritance tax ... need not approximate, either in amount or in the extent of the increase by graduation, to what such a tax should ultimately be." As the states have full power to levy taxes on inheritances and at the present time are deriving probably as much as $10,000,000 per annum from this source, it must be manifest that, if the scale adopted by Congress be high, the resources of the states will be correspondingly curtailed. In case of conflict, national taxes would take precedence over state taxes. We should also bear in mind that the power to tax is the strongest of all governmental powers, that it involves the power to destroy, that it generally knows no limitation except the discretion and moderation of the lawmakers, and that of all powers it is the one most liable to abuse.

From the time of the Declaration of Independence to the present hour, the distinctive feature of the American system of government has been equality before the law, not merely equality of rights but equality of duties and equality of burdens. Equality has been demanded in all things including especially taxation. The few exceptions in taxation, particularly in times of war, do not affect the general rule that has been followed. The courts have declared that according to American ideals "common justice requires that taxation, as far as possible, should be equal." Experience has shown that the only effectual protection against injustice and discrimination in taxation lies in the observance of some rule of equality and apportionment; and, although it is true that absolute equality is not always attainable, nevertheless an approximation to equality should be regarded as indispensable. As Hamilton said, "The genius of liberty reprobates everything arbitrary or discretionary in taxation." And Judge Cooley in his famous work on "Constitutional Limitations" said: "It is of the very essence of taxation that it be levied with equality and uniformity, and to this end, that there should be some system of apportionment. Where the burden is common, there should be common contribution to discharge it. Taxation is the equivalent for the protection which the government affords to the persons and property of its citizens; and as all are alike protected, so all alike should bear the burden, in proportion to the interests secured."[60]

In proportional or equal taxation, whereby every property owner contributes toward the expenses of the common government according to the amount of property he owns or inherits, or according to the income he enjoys, we find a perfectly safe and consistent rule and a definite and logical principle upon which to work. Proportional taxation subjects to the burden of government fairly and equally all property owners without distinction and without discrimination. Nothing is left to mere discretion or to the play of arbitrary and irresponsible power, and no class is likely to be unjustly singled out or discriminated against. Where property is as generally distributed as it is in this country, a proportional tax ordinarily reaches in one form or another a majority of the constituents of those who vote the taxes, and the sense of responsibility to these constituents operates as a conservative force and as a check upon unfair and unjust taxes, as well as upon improvident and extravagant expenditures. A proportional tax generally creates a large body of tax-paying voters whose property interests impel them to watch their representatives closely and to hold them to strict accountability. We then have taxation in its practical operation going hand in hand with representative responsibility, which was the cardinal principle for which our War of Independence was fought. A legislator who is conscious of the fact that a large, if not a controlling, number of his constituents will feel the burden of any tax he votes, is necessarily more careful, more prudent, more economical and more inclined to be just than if no such sense of responsibility exists.

On the other hand, where the great majority of voters are to be exempted from taxation, and where, accordingly, they will feel that they have no personal interest in governmental expenditures, they will be likely to take little or no pains to see that there is a fair apportionment of taxes which others must pay, or any economy in governmental expenditures for which others must provide. Their sense of justice and civic duty will become blunted. It will follow that, if the lawmakers are at liberty to enact laws which exempt the great majority of their constituents from taxation and cast the burden and expense of government on the few rich, frequently less than two or three per cent. of the voters in their respective districts, there will exist no practical restraint upon expenditure, but, on the contrary, every temptation to extravagance, wastefulness and injustice.

A graduated or progressive tax is necessarily arbitrary, for there is no definite rule or principle to apply to the scale. The rate, reasonable at first, may ultimately become confiscatory. There is nothing to check or stop the ascending scale. One act of injustice will lead to another. The appetite will grow and produce fresh injustice. If a tax of twenty-five per cent. on large fortunes now seems to some but a moderate beginning, where will the tax stop, and who is to determine what is or is not reasonable and beyond what point a legislative body shall not go? A few advocates of progressive taxation have already suggested fifty per cent. as a maximum applicable to the so-called surplus of large fortunes, but others more radical and less responsible may readily advocate a tax of one hundred per cent. upon the surplus they regard as superfluous or unhealthful. There is, indeed, no limit to the possible ascent in the scale of progression, and no power to prevent abuse and oppression on the part of temporary and irresponsible majorities. The rich would then be completely at the mercy of mere numbers.

During the French Revolution, the experiment was tried under the name of compulsory loans. These loans finally absorbed fifty per cent. of such incomes as the majority of the legislative assembly saw fit to consider as _abondants_, and one hundred per cent. of all incomes which they thought were _superflus_.

The late W.E.H. Lecky, one of the most eminent historians of our day, wrote as follows of progressive taxation in his work on "Democracy and Liberty": "When the principle of taxing all fortunes on the same rate of computation is abandoned, no definite rule or principle remains. At what point the higher scale is to begin, or to what degree it is to be raised, depends wholly on the policy of governments and the balance of parties. The ascending scale may at first be very moderate, but it may at any time, when fresh taxes are required, be made more severe, till it reaches or approaches the point of confiscation. No fixed line or amount of graduation can be maintained upon principle, or with any chance of finality. The whole matter will depend upon the interests and wishes of the electors; upon party politicians seeking for a cry and competing for the votes of very poor and very ignorant men. Under such a system all large properties may easily be made unsafe, and an insecurity may arise which will be fatal to all great financial undertakings. The most serious restraint on parliamentary extravagance will, at the same time, be taken away, and majorities will be invested with the easiest and most powerful instrument of oppression. Highly graduated taxation realizes most completely the supreme danger of democracy, creating a state of things in which one class imposes on another burdens which it is not asked to share, and impels the state into vast schemes of extravagance, under the belief that the whole cost will be thrown upon others."

In McCulloch on "Taxation," for fifty years the standard treatise in England on the subject, the following language is used: "It is argued that, in order fairly to proportion the tax to the ability of the contributors, such a graduated scale of duty should be adopted as should press lightly on the smaller class of properties and incomes, and increase according as they become larger and more able to bear taxation. We take leave, however, to protest against this proposal, which is not more seductive than it is unjust and dangerous.... If it either pass entirely over some classes, or press on some less heavily than on others, it is unjustly imposed. Government, in such a case, has plainly stepped out of its proper province, and has assessed the tax, not for the legitimate purpose of appropriating a certain proportion of the revenues of its subjects to the public exigencies, but that it might at the same time regulate the incomes of the contributors; that is, that it might depress one class and elevate another. The toleration of such a principle would necessarily lead to every species of abuse."

The well-known French political economist and scientist Leroy-Beaulieu in his works, _Traité d'Economie Politique_ and _Science des Finances_, discusses at length the whole subject of graduated or progressive taxation, and condemns it as vicious in theory and unwise and unjust in practice. Among other things he says: "Progressive taxation constitutes actual spoliation. It violates, besides, the rule, established by all civilization, that taxation ought to be imposed with the full consent of the taxpayer; for, it is quite clear, that in this case, it is the mass of the voters who relieve themselves of the heavy weight of the tax and cast it upon the few, and these few do not consent, even tacitly, to the excess with which the government wishes to burden them. When the rate of the tax is equal for all, we can consider that the vote for the tax by the legislature carries with it the implied acquiescence of all the assessable; otherwise not.... Every system of progressive taxation, however attenuated, is iniquitous and dangerous."

And the same conclusions have been reached by a number of other distinguished French scholars and statesmen, among whom may be cited Thiers, Beauregard and Stourm.