CONSTITUTIONAL LAW - RETROACTIVITY - FEDERAL STAMP TAX ON PROFITS ACCRUING FROM THE SALE OF SILVER BULLION

Authors

William J. Isaacson, University of Michigan Law SchoolFollow

Abstract

Respondent purchased silver bullion on May 3, 1934, subsequently selling it on May 23 and 24. On the profits of this transaction he was required to pay a tax which he unsuccessfully attempted to have refunded. The Silver Purchase Act of June 19, 1934, imposed a fifty per cent tax consisting of stamps attached to the memorandum of sale on all profits arising from such transfers. The act further provided that the tax was to be applicable on all sales made on or after May 15, 1934. The court of claims upheld the respondent's contention that the act was unconstitutional because of its retroactive operation. Held, the Act of June 19, 1934 was a special income tax and therefore it was constitutional despite the limited retroactivity. Prior income tax acts had been held valid notwithstanding their retrospective operation. The thirty-five day period of retroactivity fixed by this statute was not unreasonable. For many months there had been a strong agitation for increased government purchases of silver. On May 22, 1934, the President sent a message to Congress recommending the purchase of silver and the imposition of a fifty per cent tax on profits made from the sale of silver. In response to this message the bill that became the Silver Purchase Act was introduced on May 23. United States v. Hudson, (U. S. 1937) 57 S. Ct. 309.

Recommended Citation

William J. Isaacson, CONSTITUTIONAL LAW - RETROACTIVITY - FEDERAL STAMP TAX ON PROFITS ACCRUING FROM THE SALE OF SILVER BULLION, 35 Mich. L. Rev. 1375 (1937).
Available at: https://repository.law.umich.edu/mlr/vol35/iss8/15