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CONGRESS,

COMMUTATION OF HOMESTEAD ENTRIES FOR TOWN

SITE PURPOSES IN OKLAHOMA.

JANUARY 30, 1907.—Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed.

Mr. MONDELL, from the Committee on the Public Lands, submitted

the following

REPORT.

[To accompany H. R. 24989.)

The Committee on the Public Lands, to whom was referred the bill (H. R. 24989) providing for the commutation for town-site purposes of homestead entries in certain portions of Oklahoma, beg leave to report favorably on the same.

This bill provides that any purchasers (not to exceed four) may commute their homestead lands purchased by them in Oklahoma under act of June 5, 1906, when such lands are desirable for town-site purposes. The bill is as follows:

A BILL To provide for the commutation for town-site purposes of homestead entries in

certain portions of Oklahoma.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That when any citizen or number of citizens (not exceeding four) who have purchased homesteads in Oklahoma Territory under act of June fifth, nineteen hundred and six, entitled "An act to open for settlement five hundred and five thousand acres of land in the Kiowa, Comanche, and Apache Indian reservations, in Oklahoma Territory," desire to found a city or town upon their said lands, it shall be lawful for them, at their option, to pay to the receiver of the land office of the district where their land is situated the full amount of the money remaining unpaid on their bid for their said land; and the person or persons so paying said money to commute their said homesteads shall at the same time file with the recorder of the county in which such city or town is situated a plat thereof for not exceeding six hundred and forty acres of land, describing its exterior boundaries according to the lines of the public surveys and of their homesteads; also giving the name of such city or town and a plat and description exhibiting the streets, squares, blocks, lots, and alleys, the size of the same, with measurements and area of each municipal subdivision, if any; the alleys, streets, public parks, and squares shall be designated, and the uses for which they are dedicated shall be given. Such inap and statement shall be verified under oath by the party for and in behalf of the person or persons proposing to establish such city or town; and within one month after such filing there shall be transmitted to the General Land Office a verified transcript of such map and statement, accompanied by the testimony of two witnesses, that such city or town has been established in good faith; a similar map and statement shall be filed with the register and receiver, and at any time after the filing of such map and statement in the General Land Office, together with the receipt of the receiver showing the aforesaid full payment of the bid made for such land, it shall be the duty of the Secretary of the Interior to at once issue a patent to the said land so paid for to the purchaser thereof.

A railroad is now being built through these lands, and the Interior Department has ruled that there is no provision of law by which purchasers of the pasture lands recently sold to homestead entrymen under act of June 5, 1906, can commute for town-site purposes, and your committee on investigation finds that towns along said railroad are an absolute necessity, and that this bill should be come a law. Your committee submits herewith a letter from the Interior Department showing the necessity for this legislation, as follows:

DEPARTMENT OF THE INTERIOR,

GENERAL LAND OFFICE,

Washington, D. C., January 26, 1907. SIR: The law to which I called your attention this morning is section 22 of the act of May 2, 1890 (26 Stat. L., 81), and in this connection I beg to call your attention to the fact that the provisions of this section were extended by the act of March 11, 1902 (32 Stat. L., 36), to the Kiowa, Commanche, and Apache lands opened in 1901. This later act refers to lands ceded by the Indians and might, by a very liberal construction, be beld to embrace the pasture lands, but in my judgment such a construction would be forbidden by the act of June 5, 1906, which directs that the pasture lands be sold in a specific manner to the highest bidder under the homestead laws. The act of 1902 will furnish you a very good guide for the legislation you have in view.

I take the liberty to send herewith a circular issued by this office, from pages 12 to 16 of which you will find the regulations, and on page 25 a copy of the act of 1902.

If I can be of further service to you in this or any other matter, please command me very freely. Yours, truly,

J. W. WITTEN,

Chief Law Clerk. Hon. John H. STEPHENS,

House of Representatives.

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CONGRESS

REFUND OF STAMP TAXES.

JANUARY 30, 1907.-Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed.

Mr. DALZELL, from the Committee on Ways and Means, submitted

the following

REPORT.

(To accompany H. R. 25187.)

The Committee on Ways and Means, to whom was referred the bills H. R. 20246 and H. R. 21198, have duly considered the same and report back the accompanying substitute bill with the recommendation that it do pass.

The purpose of this bill is to provide for the refunding of certain taxes collected pursuant to the provisions of the war-revenue act of 1898 on legacies and distributive shares of personal property and also of taxes imposed pursuant to the same act on manifests for the clearance of cargoes exported from the United States to foreign countries.

For the purpose of meeting expenses incident to the carrying on of the Spanish war, Congress passed an act, which was approved June 13, 1898, entitled "An act to provide ways and means to meet war expenditures, and for other purposes” (30 Stat. L., 448).

Sections 29 and 30 of this act provided for the imposition and collection of a tax on legacies and distributive shares of personal proerty.

Section 30 related to the method of collecting the tax.
Section 29 is (so far as material) as follows:

Sec. 29. That any person or persons having in charge or trust, as administrators, executors, or trustees, any legacies or distributive shares arising from personal property, where the whole amount of such personal property as aforesaid shall exceed the sum of $10,000 in actual value, passing, after the passage of this act, from any person possessed of such property, either by will or by the intestate laws of any State or Territory, or any personal property or interest therein, transferred by deed, grant, bargain, sale, or gift, made or intended to take effect in possession or enjoyment after the death of the grantor or bargainer, to any person or persons, or to any body or bodies, politic or corporate, in trust or otherwise, shall be, and hereby are, made subject to a duty or tax, to be paid to the United States as follows-that is to say, etc.

The remainder of the section regulates the amount of the tax in accordance with the relationship of the beneficiary to the decedent.

Under the provisions of this act taxes were imposed and collected by the Treasury Department in the first instance only upon the interest in property to which a person succeeded in possession and enjoyment upon another's death.

On March 2, 1901, the original war-revenue act was amended in several particulars. (31 Stat. L., 938.) Inter alia the provision in the original act that the tax or duty “ shall be due and payable in one year after the death of the testator was stricken out, and the provision limiting the duty of executors, administrators, or trustees to those“ having in charge or trust any legacy or distributive share” was also stricken out, as was also the provision which related to the residence of the deceased person. It was also provided in this latter act that “any tax paid under the provisions of sections 29 and 30 shall be deducted from the particular legacy or distributive share on account of which the same is charged."

After the passage of this act the Treasury Department imposed and collected taxes to a large amount upon reversionary interests, upon the assumption that the original war-revenue act was so modified by this latter act as to make such taxes collectible.

On April 12, 1902, Congress passed "An act to repeal war-revenue taxation, and for other purposes” (32 Stat. L., 96). By the provisions of this act the tax on legacies was repealed, the repeal to take effect July 1, 1902.

February 20, 1905, the Supreme Court of the United States in the case of Vanderbilt v. Eidman (196 U. S., 480) held that neither the original war-revenue act nor the amendatory act of March 2, 1901, authorized the imposition of taxes on legacies which did not pass into possession and enjoyment prior to July 1, 1902.

On June 27, 1902, an act was approved entitled "An act to provide for refunding taxes paid upon legacies and bequests for associations of a religious, charitable, or educational character, for the encouragement of art, etc., under the act of June 13, 1898, and for other purposes” (32 Stat. L., 406).

The third section of that act reads as follows: SEC. 3. That in all cases where an executor, administrator, or trustee shall have paid, or shall hereafter pay, any tax upon any legacy or distributive share of personal property under the provisions of the act approved June 13, 1898, entitled "An act to provide ways and means to meet war expenditures, and for other purposes," and amendments thereof, the Secretary of the Treasury be, and he is hereby, authorized and directed to refund, out of any money in the Treas. ury not otherwise appropriated, upon proper application being made to the Commissioner of Internal Revenue, under such rules and regulations as may be prescribed, so much of said tax as may have been collected on contingent beneficial interests wbich shall not have become vested prior to July 1, 1902. And no tax shall hereafter be assessed or imposed under said act approved June 13, 1898, upon or in respect of any contingent beneficial interest which shall not become absolutely vested in possession or enjoyment prior to said July 1, 1902.

Reviewing now the case up to this time, it appears:

1. That it was universally agreed that reversionary legacies were not taxable under the original war-revenue act and were not taxed.

2. That reversionary legacies were taxed under the act of March 2, 1901, on the assumption that that act so modified the original act as to make such tax collectible.

3. That under the law as construed by the Supreme Court reversionary legacies were not taxable either under the original act or under the supplemental act.

4. That Congress repealed the war-revenue act, and subsequently provided for the refunding of taxes paid upon legacies or distributive shares of personal property under that act.

Had the matter rested here there would be no necessity for the passage of this bill, because the Treasury Department would have made refundment.

On June 20, 1905, however, the Comptroller of the Treasury held section 3228, Revised Statutes, applicable to those claims falling within the third section of the act of June 27, 1902, the refunding act, though previous to that time, on June 9, 1905, the Commissioner of Internal Revenue had decided that the provisions of section 3228, Revised Statutes, did not apply to such claims.

Section 3228, Revised Statutes (an act approved June 6, 1872), reads as follows:

All claims for the refunding of any internal tax alleged to have been erroneously or illegally assessed or collected, or of any penalty alleged to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfuly collected, must be presented to the Commissioner of Internal Revenue within two years next after the cause of action accrued : l'rovided, That claims which accrued prior to June sixth, eighteen hundred and seventy-two, may be presented to the Commissioner at any time within one year from said date. But nothing in this section shall be construed to revive any right of action which was already barred by any statute on that date.

It seems clear for various reasons that this ruling of the Comptroller of the Treasury was in error. It is not likely that Congress when it passed the refunding act had in mind the provisions of an act passed more than thirty years before and which had no relation to succession, inheritance, or legacy taxes. On the other hand, if Congress did have such statute in mind, it is fair to presume from the language of the refunding act that it did not intend that the limitation in section 3228 should apply. The refunding act says, in terms, “ in all cases where an executor, administrator, or trustees shall have paid, etc.”. It does not say “ in all cases where a claim shall be presented within two years,

in all cases subject to existing limitations,” but it does say " in all cases," and no authority exists for reading into the law words that the lawmakers omitted therefrom.

Moreover, the language of the refunding act specifically refers to all cases

of payment under the provisions of the act approved June 13, 1898; ” and yet it is manifest that there may have been many cases of payment under the act of June 13, 1898, that were made more than two years prior to the passage of the refunding act. Congress can not be presumed to have done a vain thing.

Again, section 3228, Revised Statutes, applies to claims over which the Commissioner of Internal Revenue has jurisdiction, while the refunding act applies to cases where the Secretary of the Treasury is the administrative officer.

The question as to whether the bar of the statute, section 3228, applies to section 3 of the act of June 27, 1902, was raised in the circuit court of the United States for the district of Massachusetts, in the case of Thomas C. Thacher et al. v. United States. On December

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