REPORT OF COMMITTEE ON CIVIL PRACTICE To the New York State Bar Association:

Your committee appointed to simplify the civil practice in the courts of the State begs leave to report that at the session of the Legislature in 1913 an act was passed which became chapter 713 of the laws of that year and which authorized your committee as members of the Board of Statutory Consolidation to prepare a short practice act, rules and forms which would simplify the civil practice in the courts of the State.

Your committee has been engaged in carrying out the instructions of the Legislature and has prepared the first volume of its report which embraces (1) a short practice act, (2) rules of court relating to "General Provisions (chapter 1) and to "Interlocutory Provisions" (chapter 2), (3) amendments to the Consolidated Laws which were made necessary in the preparation of the foregoing, and (4) a "Rights and Limitations Law," together with extensive notes explaining the proposed new practice provisions thus far prepared.

The justices of the Appellate Division have appointed a committee consisting of the presiding justice of each department, and such associates as the presiding justices may deem necessary, to co-operate with the Board in connection with the preparation of the court rules before their presentation to the Legislature.

It is expected that the entire practice act, rules and forms with such amendments to the Consolidated Laws and such new Consolidated Laws as may be found necessary will be prepared in time for presentation to the Legislature of 1915 as required by the statute authorizing the work.

Inasmuch as your committee as a board has been entrusted by the Legislature with the actual work of preparing the practice act, rules and forms, it is suggested that the President of the Association be authorized to appoint a new committee to examine the work on behalf of the Association and Bar when the Board shall be prepared to submit it for such examination.

Respectfully submitted,

A. J. RODENBECK.

Judge Rodenbeck:

I will offer this resolution which I have prepared, carrying out the suggestions of the Board:

WHEREAS, At the session of this Association held. last year the committee of this Association on the simplification of the civil practice made a report which was subsequently presented to the Legislature, and

WHEREAS, The Legislature, by chapter 713, of the Laws of 1913, authorized and directed the committee constituting the Board of Statutory Consolidation to prepare a practice act, rules and forms substantially in accordance with said report, and

WHEREAS, The Board is now engaged in the preparation of the act, rules, and forms and expects to present the same to the legislative session of 1915, and has requested this Association to appoint a committee to examine its work as it progresses, so as to hasten its adoption as soon as acceptable, therefore,

Resolved, That a committee of fifteen members of this Association be appointed by the President to examine the practice act, rules and forms prepared by the Board of Statutory Consolidation, to take such action in relation thereto as may seem advisable, and report to this Association.

Henry A. Forster, of New York:

Mr. President, I move its adoption.

The motion was duly seconded and carried unanimously. The President:

The Committee of Arrangements requested me to invite Congressman Hull, of Tennessee, who is the author of the Income Tax Law, to address the Association. They went over to Washington and met the Congressman and told him that the members of the New York State Bar Association would be glad to hear him and be glad to hear him on any phase of the subject he might speak on, and he most courteously replied that it would give him very great pleasure to meet the Bar Association, and if he could be of service, he would be glad to do so. He is present and I now have the pleasure of introducing to you the Honorable Cordell Hull, of Tennessee. (Applause.)

Hon. Cordell Hull, of Tennessee, read his paper as follows:

SOME FEATURES OF THE NEW INCOME TAX LAW

Mr. President, and Members of the State Bar Association.

I desire to express my sincere thanks for your invitation to be present on this occasion, and for the high privilege of participating in the proceedings of this, the largest State Bar Association in the United States. May I also express the great respect and admiration which I, in common with the lawyers of other States, entertain for the high professional standard, ability, probity and learning which have always characterized the legal profession of the State of New York.

During the past year the Congress of the United States has enacted a number of laws of nation-wide interest and importance. As a part of the legislation designed to establish a new national fiscal policy, an income tax law has been enacted. I ask the indulgence of this distinguished assemblage while I briefly comment upon some of the more important features of that law.

It must be admitted that the history of all taxation reveals a constant struggle between classes- each striving to shift the chief burden of taxation upon the other. Taxation is coeval with organized society. The income tax is the outgrowth of centuries of tax legislation throughout the world. By universal consent it more nearly approximates justice in taxation than any other general tax method yet devised. More than fifty countries. and States have adopted this method of taxation, and none have repealed it. To-day it is in operation in every leading country in the world save France, and she is in the act of adopting it. The same permanency may be predicted for the new law here. The incorporation of this tax as a part of the newly adopted fiscal policy of this country marks the culmination of a contest that has been waged in its behalf throughout the nation for twenty years. Our former income tax laws should never have been repealed. During the early 70's, when the war taxes were being gradually abolished, the ablest statesmen of that time earnestly opposed the abandonment of the income tax, upon the ground that it was the most just and equitable tax then levied by the United States, and, in the language of John Sherman, because it "was the only discrimination in our tax laws that will reach wealthy men as against the poorer classes of people."

The Income Tax Law of 1894 was declared invalid by the Supreme Court upon the ground that a tax imposed

upon income derived from real estate or invested personalty was a direct tax and must, therefore, be levied by the rule of apportionment. From this decision the friends of the tax respectfully appealed and sought to overturn it by securing an amendment to the Constitution of the United States. This amendment was adopted in February, 1913. Strange to say, Congress in drafting and submitting this amendment to the States, instead of dealing with this subject after the manner of the eleventh amendment to the Constitution by making the amendment declare that "taxes imposed on incomes from whatsoever source derived shall not be construed to be direct taxes,' and thereby classifying this tax, simply submitted an amendment relating alone to the method of laying a tax on incomes, and so exempted the tax from the rule of apportionment. In the light of this amendment and the decision of the Pollock case, would a tax on income derived from real estate or invested personalty now be considered a direct or an indirect tax? The weight of opinion expressed in the Senate at the time this amendment was considered was to the effect that it would continue to be a direct tax. If this view be correct, under what, if any, rule shall the tax be laid? The Constitution only requires duties, imposts and excises to be laid according to the rule of uniformity. These terms are understood to embrace all the indirect forms of taxation. Since a general income tax is no longer subject to the rule of apportionment, it cannot be contended, upon the other hand, that the rule of uniformity will apply unless this tax should be treated as having been restored to the category of indirect taxation by virtue of the recent amendment to the Constitution. It is probable that in the future the courts, as they did prior to 1894, will treat a tax imposed upon income derived from real