Under the Act of Congress of July 13, 1866, iron castings, cast
for thimbleskeins and pipe boxes, between the 1st of September,
1866, and the 1st of March, 1867, were subject to an internal
revenue tax.
Error to the Circuit Court for the Eastern District of
Wisconsin, in which court a certain Van Arsdale brought suit
against Cheney, collector of internal revenue, to recover duties
paid the said collector on certain iron castings, cast for thimble
skeins and pipe boxes, matters used in the construction of the
running gear of vehicles for the road. The case was thus:
An Act of June 30, 1864, [
Footnote 1] to provide internal revenue to support the
government, to pay interest on the public debt, and for other
purposes, amended by an Act of March 3, 1865, [
Footnote 2] laid duties on nearly every sort of
manufacture, including pig iron, railroad iron, all iron advanced
beyond blooms, slabs, or loops, on iron castings used for bridges
or other permanent structures, on stoves and hollow ware, on steel
in ingots, bars, sheet, or wire &c.
An Act of July 13, 1866, entitled "An act to reduce internal
Page 82 U. S. 69
taxation and to amend an act entitled "An act to provide
internal revenue to support the government, to pay interest on the
public debt, and for other purposes," approved June 30, 1864, and
acts amendatory thereof," in its 9th section [
Footnote 3] imposes:
"On all
iron, not otherwise provided for, advanced
beyond muckbar, blooms, slabs, or loops, and not advanced beyond
bars, and band, hoop, and sheet iron &c., a tax of $3 per
ton."
"On plate iron &c., and cut nails and spikes &c., a tax
of $5 per ton."
"On
steel made directly from muckbar, blooms, slabs, or
loops, a tax of $3 per ton."
"On stoves and hollow castings in all conditions, whether rough,
tinned, or enamelled, and on
castings of iron not
otherwise provided for, a tax of $3 per ton."
The act in that same section [
Footnote 4] imposes:
"On all manufactures, not otherwise provided for, of cotton . .
. wood . . . iron . . . steel, or of other materials, a tax of
5 percent ad valorem."
The same act in a subsequent, its 10th, section [
Footnote 5] exempts:
"Castings for iron bridges, malleable iron castings unfinished,
and castings of all descriptions made specially for locks, safes,
looms, spinning machines, steam engines, hot air and hot water
furnaces, and sewing machines, and not sold or used for any other
purpose, and upon which a tax was assessed and paid on the article
of which the casting was part."
"Steel made from iron
advanced beyond muckbar, blooms,
slabs, or loops in ingots, bars, rails made and fitted for
railroads, sheet, plate, coil or wire, hoop skirt wire, covered or
uncovered; car wheels,
thimble skeins and pipe boxes, and
springs, the and axles
made of steel used exclusively for
vehicles, cars, or locomotives; and clock springs, faces, and
hands."
We have thus far last spoken of an Act of July 13, 1866.
By an Act of March 2, 1867, it was enacted: [
Footnote 6]
"That on and after March 1, 1867, in addition to the
articles
Page 82 U. S. 70
now exempt by law, the articles and products hereinafter
enumerated shall be exempt from internal tax -- namely,
thimble
skeins and pipe boxes made of iron."
With these statutes on the statute book, Van Arsdale, a
manufacturer of iron castings &c., brought the suit already
referred to. The question presented by the suit was whether iron
castings, cast for thimble skeins and pipe boxes between the first
day of September, 1866, and the first day of March, 1867, were
subject to an internal tax under the act of Congress of July 13,
1866.
Evidence having been given tending to show that up to July,
1866, thimble skeins and pipe boxes had not been made of steel, but
only of iron, the court instructed the jury that the act in
question "exempted from taxation thimble skeins and pipe boxes,
whether made of steel
or iron, cast or wrought."
Verdict and judgment having been given for the plaintiff, the
collector, whose counsel had contended that the exemption applied
only when the articles were made of
steel, brought the
case here.
Page 82 U. S. 71
MR. JUSTICE STRONG delivered the opinion of the Court.
The question in controversy arises under the act of July 13,
1866. That was an act
"to reduce internal taxation, and to amend an act entitled 'An
act to provide internal revenue to support the government, to pay
interest on the public debt, and for other purposes; approved June
30th, 1864, and acts amendatory thereof.'"
By its ninth section, it was enacted that there should be
assessed, collected, and paid
"on stoves and hollow ware in all conditions, whether rough,
tinned, or enamelled,
and on castings of iron, not
otherwise provided for, a tax of three dollars per ton."
This included iron castings of every kind, except castings for
iron bridges, unfinished malleable iron castings, and castings made
specially for locks, safes, looms, spinning machines, steam
engines, hot air and hot water furnaces, and sewing machines, and
not sold or used for any other purpose, and upon which a tax was
assessed and paid on the article of
Page 82 U. S. 72
which the casting was a part. All these were exempted from tax
by the tenth section, and special provision was therefore made for
them. It is therefore clear that castings made for thimble skeins
and pipe boxes, between September 1, 1866, and March 1, 1867, were
subject to a tax of three dollars per ton, unless they were
specially exempted. This we do not understand to be controverted.
But it is insisted that they were exempted by the tenth section of
the act. That section, it should be borne in mind, had reference to
the provisions of the revenue act of June 30, 1864, as amended by
the Act of March 3, 1865, which imposed taxes upon most, if not
all, of the articles which, in 1866, it was proposed to put upon
the free list. It carried out the design avowed in the title, a
reduction of taxation. It mentioned in detail and in alphabetical
order certain products, articles, and classes of articles which had
been previously taxed, and it declared that they should be exempt
from internal taxation. Among these was
"steel made from iron, advanced beyond muckbar, blooms, slabs,
or loops, in ingots, bars, rails made and fitted for railroads,
sheet, plate, coil or wire, hoop skirt wire, covered or uncovered,
carwheels, thimble skeins, and pipe boxes, and springs, tires,
axles made of steel used exclusively for vehicles, cars, or
locomotives, and clock springs, faces, and hands."
But was this an exemption of all thimble skeins and pipe boxes,
as ruled in the court below, or only of those articles when made of
steel? Waiving consideration of the question whether the exempting
clause did not refer to the
ad valorem tax of five
percent, which the act imposed on "all manufactures not otherwise
provided for, wholly or in part of cotton, . . . wood, . . . iron,
steel, . . . or other materials," rather than to the specific tax
upon the materials of which those manufactures, when finished, were
wholly or in part composed, we think the exemption cannot be
construed beyond thimble skeins and pipe boxes made of steel and
used for vehicles, cars, or locomotives, and, consequently, that it
did not include thimble skeins and pipe boxes made of iron. It is
quite evident to us that all the articles enumerated in this
Page 82 U. S. 73
clause of the exempting section were steel articles. If this is
not so, the act is plainly self contradictory. Its tenth section
must be construed in connection with its other sections, and so
construed, if possible, that effect shall be given to every part.
But if we look at the ninth section it will be seen that the act
imposed a specific tax upon bars, upon rails for railroads, upon
sheet iron, plate iron, coil and wire, upon castings of iron for
which no special provision was made, as also upon all steel made
directly from muckbar, blooms, slabs, or loops. The act of 1864 had
taxed all steel, but the act of 1866 was, in this particular, less
comprehensive. It, however, imposed a tax upon all steel made
directly from muckbar, blooms, slabs, or loops. It is in view of
these provisions of the ninth section, and in harmony with them,
that the exemptions made by the tenth section are to be construed.
It cannot be admitted that the same act which taxed specifically
certain varieties of iron in one section, expressly exempted them
in the next. Such inconsistency is not to be attributed to
Congress. Nor is it at all necessary. The imposition of taxes and
the declared exemptions are perfectly consistent with each other if
the exempting clause is construed, as it may be, to include only
articles made of steel. Thus, steel itself is taxed when made
directly from muckbar, blooms, slabs, or loops, and exempt when
made from more advanced iron. Bars and rails are taxed when made of
iron, as are sheet iron, plate iron, iron coil and wire, but they
are exempt when made of the described variety of steel. Such a
construction, and such alone, preserves the consistency of the act
and gives effect to every part. And it is the natural construction.
The excepting clause includes three classes of articles. The first
is steel made from iron in an advanced state, whether, when made,
it be ingots, bars, rails for railroads, sheet, plate, coil, or
wire, or hoop skirt wire, whether covered or uncovered. The second
class is car wheels, thimble skeins, and pipe boxes, and springs,
tires, and axles, made of steel, used exclusively for vehicles,
cars, or locomotives. The third class is clock springs, faces, and
hands.
Page 82 U. S. 74
But why, it is asked, if only steel articles were intended to be
embraced in the clause, repeat the qualification? Why add to the
words "springs, tires, and axles," the superfluous words "made of
steel?" The reason will be evident when the whole act is
considered. It is to be observed that the articles mentioned in the
first class are those made of a particular kind of steel, namely,
that made of iron advanced beyond muckbar, blooms, slabs, or loops.
Upon such steel no tax was imposed by the ninth section, though one
had been by the act of 1864. It is true, as we have said, the ninth
section levied a tax upon steel, but it was upon such steel only as
was made directly from muckbar, blooms, slabs, or loops, not from
iron in a higher state of advancement. The second class embraces
articles made of steel generally, used exclusively for vehicles,
cars, or locomotives. They are exempt, if made of steel, no matter
what the kind of steel may be, whether made from muckbar, blooms,
slabs, or loops, or from iron advanced beyond those stages. It was
therefore necessary to repeat the qualification "made of steel,"
for had it not been repeated, only those car wheels, thimble skeins
and pipe boxes, and springs, tires, and axles, or the last three
named of them, which were made of a particular kind of steel, would
have been exempted. The repetition enlarged the list. Thus there is
no force in the argument that the use of the words "made of steel"
was superfluous and unmeaning, if the exempting clause was designed
to include only steel articles.
It is further said that when the act was passed thimble skeins
and pipe boxes were not made of steel, and witnesses testified that
they never knew that material employed for such articles. From this
it is argued that Congress must have intended to exempt them when
made of iron, for they must be presumed to have intended an
exemption of something that had an existence. There is some
plausibility in the argument, but it is more specious than sound.
Congress must have known that of late years the uses of steel as a
substitute for iron had been rapidly increasing. It was but a short
time before that steel rails, tires, and axles had come
Page 82 U. S. 75
into use. Thimble skeins and pipe boxes are used in connection
with axles, and it would seem, therefore, to have been not an
unreasonable presumption that Congress contemplated the probable
substitution of steel in their manufacture, even if they were aware
that the substitution had not already been made. The exemption
itself was an encouragement to the use of steel.
It may be added that our opinion respecting the meaning of the
exemption and its extent has some confirmation in the fact that in
1867 Congress, by a new enactment, expressly exempted thimble
skeins and pipe boxes "made of iron." Such legislation indicates,
at least, a conviction on their part that those articles were not
placed in the free list by the act of 1866.
We think, therefore, the circuit court erred in instructing the
jury that the act of 1866 exempted from taxation thimble skeins and
pipe boxes, whether made of steel or iron, cast or wrought, and
that no taxation on them could be lawfully assessed.
Judgment reversed and a de novo awarded.
NOTE
At the same time with the preceding case was adjudged another
from the same circuit, on the same general subject, and depending
on certain parts of the statute already quoted; the new case
having, however, two additional questions. It was the case which
follows this one.*
[
Footnote 1]
13 Stat. at Large 223.
[
Footnote 2]
Ib., 469.
[
Footnote 3]
14 Stat. at Large 130, 131.
[
Footnote 4]
P. 132.
[
Footnote 5]
Pp. 148, 149, 150.
[
Footnote 6]
14 Stat. at Large 477.
