1. The act of the Legislative Assembly of the District of
Columbia of June 26, 1873, exempting from general taxes for ten
years thereafter such real and personal property as might be
actually employed within said District for manufacturing purposes
provided its value should not be less than $5,000, did not create
an irrepealable contract with the owners of such property, but
merely conferred a bounty liable at any time to be withdrawn.
2. Congress, by the Act of June 20, 1874, 18 Stat. 117, which
superseded the then existing government of the District, declared
that for the fiscal year ending June 30, 1875, there should
"be levied on all real estate in said District, except that
belonging to the United States and to the District of Columbia, and
that used for educational and charitable purposes"
certain specified taxes.
Held that under said act, real
property used for manufacturing purposes, although within the
exemption granted by the act of the legislative assembly, became
subject to taxation.
On the 26th of June, 1873, the Legislative Assembly of the
District of Columbia enacted that
"All property, real and personal, which may hereafter be
actually employed within the limits of the District of Columbia for
manufacturing purposes, shall be exempt from all general taxes for
a period of ten years from the date of this act going into effect,
provided that the value of the property so employed for
manufacturing purposes shall not be less than $5,000."
Laws Dist. of Col. 126.
The fourth section of the Act of Congress approved June 20,
1874, 18 Stat. 117, enacts as follows:
"That for the support of the government of the District of
Columbia, and maintaining the credit thereof, for the fiscal year
ending June 30, 1875, there shall be levied on all real estate in
said District, except that belonging to the United States and to
the District of Columbia, and that used for educational and
charitable purposes, the following taxes, namely."
Under this act, the Commissioners of the District assessed, for
the taxes for the year ending June, 1875, certain real property of
Welch within the District which was employed for manufacturing
purposes and was of the value of $5,000.
His bill of complaint alleges that one faith of the above
Page 97 U. S. 542
act of the legislative assembly, he expended large sums of money
in improving his said property; that in pursuance of the said act,
the commissioners exempted it from the taxes of the year ending
June, 1874, but are now about to sell it for the taxes of 1875, and
that these proceedings cast a cloud upon his title. He asks for a
perpetual injunction to restrain the collection of these taxes and
for such other relief as may be necessary.
To this bill the defendants, who are the tax collector and the
commissioners of the District, demurred. The demurrer was sustained
at the special term of the Supreme Court of the District, which
action having been affirmed at the general term, Welch appealed to
this Court.
MR. JUSTICE HUNT, after stating the case, delivered the opinion
of the Court.
It is not open to reasonable doubt that Congress had power to
invest, and did invest, the District government with legislative
authority, or that the act of the legislative assembly of June 26,
1873, was within that authority. We shall therefore consider the
question as if that act exempting manufacturing property from
taxation had been passed directly by Congress. It does not create a
contract in the sense that it cannot be repealed. It has been
frequently held that the incorporation of a company by special
charter, with the exemption of its lands or other property from
taxation, creates, upon the acceptance of the charter, a contract
which will insure that exemption during the period specified. But
the present case does not come within that rule. This is a bounty
law, which is good as long as it remains unrepealed, but there is
no pledge that it shall not be repealed at any time.
Salt Company v. East
Saginaw, 13 Wall. 373.
The counsel for the appellant correctly states the question as
this: has the act of the legislative assembly of June, 1873, been
repealed or suspended by the act of Congress of June 20, 1874?
Page 97 U. S. 543
It is also correctly stated, as a legal proposition, that a
second law on the same subject does not, without a repealing clause
or negative words, repeal a former one unless its provisions are so
clearly repugnant as to imply a negative.
Beals v.
Hale, 4 How. 37;
Ex Parte
Yerger, 8 Wall. 85.
We are, however, of the opinion that we cannot do otherwise than
hold that this case was correctly decided -- that is that by the
more recent act it was intended to subject to taxation all the real
property in the District except such as was specifically
exempted.
We are to presume that Congress knew that, as the law stood on
the 20th of June, 1874, the property in the District was liable to
taxation, with certain exceptions, and that it knew of what such
exceptions consisted. We are also to presume that it appreciated
the effect of its action when it took upon itself anew, and in
derogation of the local authorities, the duty of fixing the
subjects of taxation; and that it knew that the result of declaring
all the property, with certain exceptions, to be liable to the
payment of taxes for the year ending June, 1875, was to make that
act stand in the place of all others upon the subject.
The exemption of manufacturing property, as we have shown, was a
bounty merely revocable at any time by the legislature. The year
following this expression of its bounty, in passing an act to
obtain means "for the support of the government and maintaining the
credit thereof," it enacts that "there shall be levied on all real
estate in said District . . . the following taxes, namely." This
general language was not used unadvisedly, without a present
remembrance that there were certain kinds of property not intended
to be included, but which would be so included unless particularly
noticed. Therefore it was added, "except that belonging to the
United States and to the District of Columbia, and that used for
educational and charitable purposes." The bounty of the government
previously extended to property used for the purposes of education,
and in dispensing its charities to the poor, the insane, the
destitute orphan, the aged and infirm, was still continued. Its
bounty of exemption, before given to those engaged in manufactures
and employing at least $5,000 therein, did not present the same
Page 97 U. S. 544
sentimental question to the legislator. He may well have thought
it a wise charity, a merciful duty, to relieve the one, and to
allow the others to bear the ordinary burdens of property engaged
in traffic or manufacture, and used for the purpose of gain.
The exemptions set forth in the Act of Congress of March 3,
1875, 18 Stat. 503, are more in detail, but of the same character
with those of 1874, and indicate a persistent intention in Congress
to include manufacturing property as a proper subject of
taxation.
But it is to be observed that the Act of June 20, 1874, is the
act of a different body from that which adopted the act of 1873,
and is a part of an act of Congress organizing a new and entirely
different system of government.
Id., 116, 117.
The first section of the act of 1874 provides that all the
general offices of the District then existing, except that of
delegate in Congress, shall be abolished, the office of delegate in
Congress continuing until the end of the existing term. The
government, then carried on by an executive, a secretary, a
legislature, and a board of public works, is superseded by a
commission of three persons (appointed by the President), whose
powers and duties are strictly prescribed. The rules respecting the
collection of taxes then assessed, including a prohibition (by sale
or hypothecation) of an anticipation thereof, are laid down, and
the compensation of all officers, except teachers in public
schools, is reduced twenty percent per annum. Certain duties
theretofore under the control of the board of public works are
vested in an officer of the army, to be detailed by the President,
under the supervision of the commissioners. In its fourth section
it then proceeds to direct the levy of a tax of three dollars for
each one hundred dollars of the assessed value of all the real
estate in the City of Washington, and two dollars and fifty cents
upon that situate in the City of Georgetown, except that belonging
to the United States or the District of Columbia, and that used for
educational and charitable purposes.
Under these circumstances, and prefaced as was the act by the
recital that this levy was made to support the government and
maintain its credit, it is apparent that the act of Congress
Page 97 U. S. 545
was intended to create a separate system, and to be independent
of the action of all preceding bodies. Other and different
exemptions had before existed; no settled system had been adopted.
The act of the legislative assembly of 1871, fixing the taxes for
that year, gave more than forty exemptions in great detail,
covering an entire page in the statute book (p. 26); that of the
same body, fixing the taxes for 1872, exempted only parsonages,
churches, the ground on which they stood, and burial grounds (p.
109); here it is declared that all real estate shall be taxed,
except that herein specifically exempted. We think that the system
in regard to taxation, including what should be taxed, the rates,
and the exemptions from taxation, was intended to be an independent
one, to abolish existing impositions or exemptions, and to form a
complete system of itself.
Nor are we able to see that this action involves a breach of
faith towards the owner of the manufacturing property. Conceding,
as the plaintiff must and does, that the exemption of his property
was of the bounty of the legislature, he knew when he accepted it
that it was liable to be revoked whenever either the local
legislature or Congress should be of the opinion that the public
interests demanded such action. He could not but realize that an
assessment of three percent upon the value of property in
Washington, or two and a half percent upon that in Georgetown,
created a heavy burden. Others felt it as he did, and it is
reasonable to suppose that Congress considered it a duty to lighten
the burden of taxation by increasing the subjects of it as far as
justice required.
Upon the whole case, we are of the opinion that the decree of
the court below was correct.
Decree affirmed.
MR. JUSTICE FIELD dissented.
