had not been made. Any offences committed and all penalties or forfeitures or liabilities incurred prior to the passage of this act under any statute embraced in or changed, modified, or repealed by this act may be prosecuted or punished in the same manner and with the same effect as if this act had not been passed.

CONSTRUCTION IN CASE OF INVALIDITY OF ANY CLAUSE, ETC.

T. and U., which follow, are from Section IV of the present tariff act.

T. If any clause, sentence, paragraph, or part of this act shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of said act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered.

U. That unless otherwise herein specially provided, this act shall take effect on the day following its passage.

RECENT POINTS.

The following points or contentions have recently come to the attention of the writer: Some contend that the deductions in the case of single and married people, in the case of the normal tax, apply as well to the additional tax.

It is urged that the salaries of Congressmen are subject to the tax, inasmuch as the provision exempting officers and employees of a State or any political subdivision thereof is followed by the exception "when such compensation is paid by the United States Government," the contention being that Congressmen are officers of the States they represent, although their salaries are paid by the National Government. See p. 38.

It is stated in the New York Sun, of Oct. 24, 1913, that Mr. Walker, an attorney thoroughly versed in the law of corporate enterprises, denies the contention that the increase in the value of the property of a person or corporation during a year constitutes taxable income for that year as being "accrued," on the ground

that "derived" income or "received" income, not "accrued" income, is that stated in the law as taxable; hence professional men and others receiving fees are not to return as fees the amount earned, though unpaid; and the same rule applies to the income of corporations. Mr. Walker denies the contention that debts can be charged off against income as a deduction only after legal proceedings by the creditor to recover have proved the debts worthless, as the law provides that the taxpayer's satisfaction of the debt's worthlessness is sufficient. Mr. Walker denies the contention that corporations have to pay the tax on interest received from Government, State and Municipal bonds, which are tax free, in the hands of individuals. He also holds that the multiple taxation of income of corporations, which are holding companies, is directed against such companies, though no such purpose is stated in the bill.

It is maintained that the proviso to C as to one deduction for husband and wife living together modifies what goes before and is after the nature of a joker. See p. 57.

TREASURY REGULATIONS AS TO COLLECTION AT THE SOURCE ON BONDS, ETC.

The following is a brief statement of the regulations, which are given in full on pp. 214 et seq. It is provided:

That the normal tax of one per cent shall be deducted at "the source," beginning Nov. 1, 1913, from income payable to (a) every citizen, residing here or abroad, and to (b) every person residing here, though not a citizen, derived from interest, although less than $3,000, upon bonds and other obligations enumerated, except the interest upon obligations of the United States or its possessions, or a State or any political subdivision

thereof.

That the term "Debtor" means all corporations, joint stock companies or associations, and insurance companies.

That to collect the tax on coupons and registered interest payable in the United States, the source shall be the debtor or its paying agent, and no other bank, etc., taking coupons, etc., for collection shall withhold the tax, provided that coupons or orders for registered interest are accompanied by certificates of ownership signed by the owners. A separate certificate shall be made out by each owner for the coupons

or interest orders for each separate issue of bonds, etc., of each debtor.

That, if the coupons or interest orders are not accompanied by certificates, the final bank, etc., receiving the coupons, etc., for collection, or otherwise, shall withhold the tax and shall attach its own certificate, giving the name and address of the owner or the person presenting the same, if the owner is not known, with a description of the coupons, etc.; also setting forth that they are withholding the tax; whereupon the debtor shall not again withhold the tax, but shall give the government the certificate of such bank, etc. Corporations receiving from the owner coupons, etc., and taking the above certificates should require those tendering the coupons, etc., to establish their identity.

That a debtor, in case of registered bonds as to principal and interest, shall deduct the one per cent from accruing interest before sending checks to registered owners or paying interest upon interest orders signed by the registered holders until there shall be filed with the debtor or its fiscal agent (not later than 30 days prior to March 1), through whom said interest is customarily paid, certificates claiming exemption, executed as follows (1) by a resident, the bona fide owner of the registered