NATURE 



361 



THURSDAY, AUGUST [4, 1890. 



THE INCOME-TAX AND THE PROMOTION 

 OF SCIENCE. 



THE case of the Commissioners of Inland Revenue 

 V. Forrest (the latter representing the Institution of 

 Civil Engineers), which was finally decided on the ist 

 inst. by the House of Ljrds, is of great importance to 

 all scientific corporations, associations, and institutions 

 in this country, and, incidentally, the judgments cannot 

 fail to interest, and possibly also to amuse, men of 

 science, because it became necessary for their Lordships to 

 consider what is science, or, rather, what the Legislature 

 meant by the word science in a particular statute. 

 Shorn of all technicality, the question was whether the 

 Institution of Civil Engineers was liable to pay income- 

 tax under the Revenue Act of 1885, section 1 1 of which was 

 framed with the object of imposing a duty of 5 per cent, on 

 the yearly value, income, or profits of bodies which escape 

 probate, legacy, and succession duties, inasmuch as they 

 never die and have no legal heirs or successors. 

 The net was thrown with the object of catching 

 trading corporations, companies, and associations, 

 and compelling them to pay, in the shape of an annual 

 impost, an equivalent for the various death duties levied 

 on private individuals. The Act imposing this tax, how- 

 ever, exempted different classes of associations, and notably 

 in sub-section 3 of section 1 1 it exempted all property the 

 income or profit of which is applied for religious or 

 charitable purposes, '' or for the promotion of education, 

 literature, science, or the fine arts." The whole question 

 therefore resolved itself into this : Is the Institution of 

 Civil Engineers an association " for the promotion of 

 science " ? The Commissioners thought it was not, in 

 the sense used in the Act ; Lord Coleridge and Mr. 

 Justice (now Lord) Field sitting in one Court agreed with 

 the Commissioners ; Lord Justice Lopes in the Court of 

 Appeal, and the Lord Chancellor in the House of Lords, 

 were of the same opinion ; but Lord Esher and Lord 

 Justice Fry in the Court of Appeal, and Lord Watson and 

 Lord Macnaghten in the House of Lords, held that the 

 Institution was one for the promotion of science, and 

 therefore exempt from the tax. The Institution therefore 

 had a majority of the judges in the Court of Appeal 

 and in the House of Lords, and it is now the law of 

 England, until the Legislature chooses to alter it, that the 

 Institution and all similar associations and bodies are 

 exempt from this tax. Science, and, indeed, literature 

 and the fine arts as well, owe a debt of gratitude to the 

 Institution for its sturdy stand against the demand for 

 payment. Although it is successful, its costs, over and 

 above what it will receive from the Crown as the losing 

 party,would, if invested, probablyyield an income sufficient 

 to satisfy the demand made upon it ; by continuing the fight 

 it has been the means of relieving the revenues of every 

 association of the kind in the country from a burden of 

 5 per cent, per annum, an impost which in some cases 

 would be intolerable, and would perhaps lead to the ex- 

 tinction of many struggling associations which are worthy 

 of more support than they receive. In a sense, all science 

 is relieved of a tax, and this it owes to the Institution of 

 Civil Engineers. 



NO. 1085, VOL. 42] 



We have said that the question turned on the meaning 

 to be attached to the phrase " promotion of science," and 

 ultimately to the word " science." The consideration of 

 this question was complicated by the circumstance that 

 in 1843 an Act was passed for dealing with the application 

 of local rating (the Act of 1885, which was in question in 

 this case, dealt wholly with Imperial taxation) to "ex- 

 clusively" scientific and literary institutions supported 

 wholly or in part by voluntary contributions. Under this 

 Act it has been decided, for example, that the Zoological 

 Society and the Russell Institution are liable to local 

 rates, and it was against decisions such as these, and 

 the instinct of judges to seek for a precedent, that the 

 Institution of Civil Engineers had to fight in the present 

 instance. Lord Macnaghten, however, boldly threw over 

 the Act of 1843 and the decisions under it altogether, 

 and refused to regard them as throwing any light on the 

 Act of 1885. It referred, he said, merely to local rates, 

 exemption from which is an invidious distinction, and 

 throws a burden on everyone in the neighbourhood ; 

 while the present case being one of Imperial taxation, the 

 range of exemption is far more extensive, and the con- 

 ditions far more liberal. 



The previous statute, and all the decisions under it, 

 being thus disposed of, the judges were deprived of pre- 

 cedents, and had to answer for themselves what was 

 science in the intention of the Legislature in 18S5. 

 Most intelligent people have a satisfactory working 

 definition of the word ; but it evidently perplexed 

 the keen and experienced legal intellects of the 

 judges in the House of Lords. The Lord Chancellor 

 thought it could not, in this place, be equivalent to know- 

 ledge, because this would exempt almost every institution 

 in the country, but that it did refer to science generally, 

 and not to any particular branch of it. The Institution 

 was, he argued, established for the benefit and interest of 

 civil engineers, and not directly (though, no doubt, in- 

 directly) for the advantage of the whole community. " I 

 think a member of it makes a very good bargain for him- 

 self in becoming a member of it," and hence he did not 

 regard it as exempt from taxation. Lord Watson took 

 quite a different view, without going largely into questions 

 of definition. It was indisputable, he said, that there 

 was a science of civil engineering, that its development 

 is of the utmost consequence to the national interests, 

 that the labours of the Institution are of value to the pro- 

 fession at large, and constitute a substantial addition to 

 the sum of human knowledge, and that it would be 

 difficult to say what more effective measures could be 

 adopted for the promotion of engineering science than 

 those of the Institution. He found, therefore, that the 

 latter applied its income, not to the professional ends ol 

 individuals, but for '• the promotion of science," and that 

 it was entitled to the exemption. Lord Macnaghten faced 

 the question of the meaning of the word " science" in the 

 Act:— 



" I see no reason why it should be confined to 

 pure or speculative science. The expression plainly 

 includes applied science, and it was intended, I think, to 

 denote a particular branch of science, as well as universal 

 science or science generally," 



This being his view. Lord Macnaghten, like Lord 

 Watson, found no difficulty in arriving at the conclusion 



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