GEORGE F. ROBERTS ET AL. MARCH 6, 1890.-Committed to the Committee of the Whole House and ordered to be printed. Mr. MANSUR, from the Committee on Claims, submitted the following REPORT: [To accompany S. 394.] The Committee on Claims, to whom was referred Senate bill 394, for the relief of George F. Roberts et al., beg leave to report the same, with the recommendation that it pass. A similar bill (H. R. 1929) was favorably reported by your committee this session, and a report thereon, No. 115, which was agreed to, and so fully sets forth the facts, that your committee adopts the same and makes it part of this report. Your committee further recommend that H. R. No. 1929 lie upon the table. H. Rep. 3 House Report No. 115, Fifty-first Congress, first session. FEBRUARY 15, 1890.-Committed to the Committee of the Whole House and ordered to be printed. Mr. MANSUR, from the Committee on Claims, submitted the following REPORT: [To accompany bill H. R. 1929.] The Committee on Claims, to whom was referred the bill (H. R. 1929) for the relief of George F. Roberts et al., have had the same under consideration and report the accompanying bill, which refers these claims to the Commissioner of Internal Revenue for examination and allowance of such amounts as he shall find to have been illegally collected, as he can fully verify the statements of the facts by the records in his office. Proper claims were made out, and certified to as being correct, by the assistant assessors, assessors, collectors, deputy collectors, and inspectors of the districts when the facts occurred. There is a great deal of other evidence corroborating the officer's statement, not necessary to be stated here, as the main facts certified to by the revenue officers are fully stated and set forth in the letter of the Hon. Green B. Raum, Commissioner of Internal Revenue, dated May 18, 1882, to Charles J. Folger, Secretary of the Treasury, as follows: Pate & Co., from July 1 to December 31, 1864, deposited in bonded warehouse 4,186 barrels distilled spirits, containing 213,885 gallons proof spirits; when these packages were removed from warehouse they contained, by actual inspection, only 200,613 proof gallons. This tax of $1.50 was collected on the full quantity deposited, amounting to $320,828.25. The tax due on the 200,6134 gallons actually found in the packages on withdrawal was $300,920.25, showing an excess of $19,908 collected. In computing the leakage in transit, the sum of $245.81 was computed on the full quantity bonded. I propose to allow the claim for the remainder of the tax appearing to have been paid by these claimants in December, 1864, as set forth, on spirits lost by leakage and evaporation while stored in bonded warehouse, to wit, $19,662.19. Very respectfully, your obedient servant, GREEN B. RAUM, Hon. John Sherman, while Secretary of the Treasury, approved the payment of such claims, and in his letter, dated November 14, 1877, says: There can be no doubt that the assessments for leakage were erroneous and improper." This was in the Wholly case, where the tax was refunded. He being out of office and Secretary Folger in office, the recommendation of Commissioner Raum that said taxes be refunded was not approved by Mr. Folger, and hence these claims remain unpaid. The claims of George F. Roberts, administrator, etc., and Henry W. Smith, surviving partner, etc., are in all essential respects similar to the claim of Pate & Co. These claimants, or their legal representatives, have been urging an allowance at various times ever since the taxes were paid. The Court of Claims found as a fact that the practice had been uniform to only assess the tax upon the quantity withdrawn from bonded warehouse prior to 1869. (18 Court of Claims, 709, Finding 3.) It is admitted that the Court of Claims had no jurisdiction of tax cases (7 Wall, 122; 9 Court of Claims, 367), and that the circuit court of the United States had none (9 Wallace, 560). It is also admitted by the Commissioner of Internal Revenue that it was the general practice to allow similar claims for the loss by leakage while in bonded warehouse under the act of 1864, and that the instructions and regulations of the Commissioner, approved by the Secretary, provided for such allowances, and that the collectors' bonded accounts were settled by crediting the loss for leakage while in bonded warehouse. In a letter of Commissioner Raum, dated May 18, 1882, proposing to allow one of these claims, all being taxed by the same law, he says: The allowance for loss by leakage while in warehouse was allowed, and collectors instructed to allow under the act of 1864, but that in some few cases the collectors misunderstood the law and collected the tax on the spirits that had been lost by leakage while in warehouse. Commis And from his letter it would appear that there are only four refunding cases that have not been allowed under the act of 1864. sioner Walter Evans, in his letter of March 17, 1884, says: That it was the general practice to allow the loss of spirits by leakage while in warehouse under the act of 1864, and this accounts for so few cases for refunding being presented. The Hon. Saimon P. Chase, Hon. Hugh McCulloch, and Hon. William P. Fessenden, while they were Secretaries of the Treasury, as also the Hon. Joseph J. Lewis, Hon. E. A. Rollins, and Hon. Green B. Raum, while they were Commissioners of Internal Revenue, each, by letters, opinions, regulations, and circulars, held that the tax was only to be collected on the quantity withdrawn from warehouse, and their interpretation of the law was sustained by the Supreme Court of the United States in 97 United States, 268, October term, 1877, where the court decides that no tax can be collected under the act of 1864, section 94, unless sold or removed for sale, and this section 94 is the same as section 55 of the act of 1864, which levied the tax upon these claimants' spirits. The Committee on Ways and Means of the Forty-sixth Congress, second session, Report No. 1119, page 15, made by Hon. John G. Carlisle, M. C., say "that the act of 1864 only taxed the quantity sold or removed for sale, and only taxed the quantity sold." And the same construction was again given to the same law by the same committee of the Fortyseventh Congress, first session, Report No. 1277, page 14, made by Hon. William D. Kelley (chairman), and the Attorney-General of the United States in 16 Opinions of Attorneys-General, 667, decides that under the act of 1864 the tax can only be collected on what was sold or removed for sale, etc., and was only collectible when it was removed into private hands. Bills have been reported both in the Senate and House to pay these claims by the following committees: Ways and Means, Forty-eighth Congress, report by Mr. Herbert; Claims, Forty ninth Congress, Report No. 1122, by Mr. Howard; Fiftieth Congress, Report No. 513, by Mr. Shaw; Senate Claims, Report No. 1230, by Senator Whitthorne; Fiftieth Congress, Report 279, by Mr. Mitchell, and the bill reported passed the Senate without a dissenting vote, and is reported this Fifty-first Congress, Report 94, by Mr. Mitchell. In this last report the committee say: The foregoing report sets out the facts correctly and states the law truly, and there is no hesitation in declaring that claimants are entitled to a refund of whatever tax they have paid on any amount over and above the number of gallons actually withdrawn. The collector of internal revenue having misconstrued the law, regulations, and the instructions of the Secretary and Commissioner of Internal Revenue and wrongfully collected from these claimants the taxes they now ask to be refunded to them, and it being clearly shown that the law, the regulations of the Department, and the invariable construction of the act of 1864 was only to tax the quantity withdrawn from bonded warehouse, all loss by leakage while in bonded warehouse was allowed. The bonded accounts of the collectors of internal revenue were settled by allowing them credit for the loss by leakage while in bonded warehouse, and several claims for such loss have been allowed and paid by the Treasury Department, and a large number of such claims have been abated, and it appears from the letters of the Commissioner of Internal Revenue that only three remain unsettled beside the Thayer case. Therefore, it would be but just, right, and legal to allow these remaining claims, and your committee are of the opinion that there was an erroneous assessment and collection of the taxes, and that they ought to be refunded. The foregoing report sets out the facts and states the law, and claimants are entitled to a refund of whatever tax they have paid on any amount over and above the number of gallons actually withdrawn. Your committee therefore report back bill H. R. 1929 without amendment and recommend its passage. House Report No. 513, Fiftieth Congress, first session. FEBRUARY 15, 1888.-Committed to the Committee of the Whole House and ordered to be printed. Mr. SHAW, from the Committee on Claims, submitted the following REPORT: [To accompany bill H. R. 2127.] The Committee on Claims, to whom was referred the bill (H. R. 2127) for relief of George F. Roberts et al., have had the same under consideration, and recommend that said bill be amended by inserting in line 6, after the word "respectively," "such amounts as shall be shown to the satisfaction of the Commissioner of Internal Revenue to have been paid by them as tax on distilled spirits in excess of the quantity withdrawn by them from United States bonded warehouse: Provided, That the amount paid to each shall not exceed the sum hereinafter stated, that is to say"; and that as so amended it do pass. The report made by the Commitee on Ways and Means of the Fortyeighth Congress, second session, so fully sets forth the facts upon which these claims are based that your committee adopt the same and make it part hereof. The report is as follows: The material facts in the case of Thayer Brothers are that, during the period from July 1 to December 31, 1864, they deposited in a bonded warehouse in the fifth district of Illinois, which was under the control of the collector and the store-keeper, 3,100 barrels of distilled spirits, containing when deposited, as shown by the certifi cates of the inspector, 190,182.12 gallons; that when said barrels were withdrawn and re-inspected there were, as shown by the re-inspection, only 182,988.58 gallons, making an actual loss while in said warehouse of 7,193.53 gallons; that they were required by the collector to pay the tax of $1.50 per gallon upon the quantity placed in the bonded warehonse, making the tax paid on the quantity lost by leakage while in warehouse $10,790.32. They filed their affidavit on the regular form (46) with the Commissioner of Internal Revenue for a refund of said tax July 18, 1867, avering the facts to be as above stated, and that the tax paid on the quantity lost by leakage while in warehouse was illegal, erroneous, and improper, and ought to be refunded, and to this affidavit was affixed the certificates of the proper internal-revenue officers. The assistant assessor certified to the facts as follows: ASSISTANT ASSESSOR'S CERTIFICATE. I hereby certify that I have carefully investigated the facts set forth in the within affidavit, and that I believe the statements to be in all respects just and true. August 22, 1867. THOMAS ELLIS, Assistant Assessor, Fourth Division, Fifth District. The assessor also certified to the facts as follows: ASSESSOR'S CERTIFICATE. I hereby certify that I have carefully investigated the facts set forth in the within affidavit of William B. Thayer, and that I believe the statements to be in all respects just and true; and I further certify that, from present personal examination, I find |