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U.S. Supreme Court

Cincinnati Soap Co. v. United States, 301 U.S. 308 (1937)

:Cincinnati Soap Co. v. United States

No. 659

Argued April 1, 2, 1937

Decided May 3, 1937*

301 U.S. 308


Section 602 1/2 of the Revenue Act of 1934 imposes a tax of 3 cents per pound upon the first domestic processing of coconut oil, and provides that all such taxes collected with respect to coconut oil wholly of Philippine production, etc.,

"shall be held as a separate fund and paid to the Treasury of the Philippine Islands, but if at any time the Philippine Government provides by any law for any subsidy to be paid to the producers of copra, coconut oil, or allied products, no further payments to the Philippine Treasury shall be made under this subsection."


1. The imposition of the tax, in itself, is a valid exercise of the taxing power, consistent with the due process clause of the Fifth Amendment. P. 301 U. S. 312.

2. A valid tax may be bound to a valid appropriation of the moneys so realized, in the same Act of Congress. P. 301 U. S. 313.

3. Whether a tax serves any of the purposes enumerated in the Constitution, Art. I, § 8, cl. 1 -- "to pay the debts and provide for the common defence and general welfare of the United States" -- is a practical question addressed to the lawmaking power, whose conclusion must be accepted by the courts unless plainly without justification. P. 301 U. S. 313.

4. Owing to the peculiar relation of dependency of the Philippine Islands and their inhabitants on the United States, it is a moral obligation of the United States to protect, defend, and provide for their general welfare. P. 301 U. S. 313.

5. The tax and appropriation may be sustained as a discharge of a moral obligation amounting to a "debt" within the meaning of the taxing clause of the Constitution. P. 301 U. S. 314.

6. Congress, from the beginning, has acted upon the view that the term "debts" includes moral obligations. Id.

7. Quaere whether the tax and appropriation in the present instance might not be justified as an exercise of the taxing power chanrobles.com-red

Page 301 U. S. 309

to provide, in a broad sense, for the public defense or the general welfare of the United States. P. 301 U. S. 315.

8. The determination of Congress to recognize the moral obligation of the Nation to make an appropriation as a requirement of justice and honor is obviously a matter of policy and discretion not open to judicial review, unless in circumstances such as are not present in this case. P. 301 U. S. 317.

9. It does not follow that, because a federal tax levied for the express purpose of paying the debts or providing for the welfare of a State might be invalid, such a tax for the uses of a territory or dependency, over which the United States has plenary power, would likewise be invalid. P. 301 U. S. 317.

10. The passage of the Philippine Independence Act of March 24, 1934, and the adoption and approval of the Constitution of the the Philippine Islands, did not withdraw the sovereignty of the United States from the Islands, nor make them foreign to the United States. P. 301 U. S. 319.

11. Congress has power to levy a tax with the collateral purpose of protecting industries of the United States. P. 301 U. S. 320.

12. Assuming the present tax levied for that purpose, it was for Congress to determine whether there was a moral duty to offset the burden of it on the Philippine production by an equivalent appropriation to the Philippine treasury. P. 301 U. S. 320.

14. The provision of the Constitution, Art. I, § 9, cl. 7, that "No money shall be drawn from the Treasury but in consequence of appropriations made by law" was intended as a restriction upon the disbursing authority of the Executive Department, and is without significance here. It means simply that no money can be paid out of the Treasury unless it has been appropriated by an Act of Congress. P. 301 U. S. 321.

15. The contention of the taxpayers in this case that there has been no constitutional appropriation of the proceeds of the tax, and that any attempted appropriation is bad, because the particular uses to which the appropriated money is to be put have not been specified, is without merit. P. 301 U. S. 321.

16. Payment of the proceeds of the tax to the Philippine Government, with no direction as to the expenditure thereof, was not an unconstitutional delegation of legislative power. P. 301 U. S. 321.

17. In dealing with the territories, possessions, and dependencies of the United States, this Nation has all the powers of other sovereign nations, and Congress, in legislating, is not subject to the same restrictions which are imposed in respect of laws for the chanrobles.com-red

Page 301 U. S. 310

United States considered as a political body of States in union. P. 301 U. S. 323.

Judgments affirmed.

Certiorari, 300 U.S. 649, to review two judgments of the District Courts sustaining demurrers to the petitions filed by the Soap Company and another in actions to recover moneys exacted as taxes. The cases had been appealed to the Circuit Courts of Appeals, but had not been heard or submitted when the writs of certiorari issued.


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