Porto Rico and the Philippine Islands shall be by the appropriate internal-revenue officers of those governments, and all revenues collected in Porto Rico and the Philippine Islands thereunder shall accrue intact to the general governments, thereof, respectively: And provided further, That the jurisdiction in this section conferred upon the district courts of the United States shall, so far as the Philippine Islands are concerned, be vested in the courts of the first instance of said islands: And provided further, That nothing in this section shall be held to exclude from the computation of the net income the compensation paid any official by the governments of the District of Columbia, Porto Rico and the Philippine Islands or the political subdivisions thereof.

N. Appropriation. That for the purpose of carrying into effect the provisions of Section II of this Act, and to pay the expenses of assessing and collecting the income tax therein imposed, and to pay such sums as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may deem necessary, for information, detection, and bringing to trial and punishment persons guilty of violating the provisions of this section, or conniving at the same, in cases where such expenses are not otherwise provided for by law, there is hereby appropriated out of any money in the Treasury not otherwise appropriated for the fiscal year ending June thirtieth, nineteen hundred and fourteen, the sum of $800,000, and the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, is authorized to appoint and pay from this appropriation all necessary officers, agents, inspectors, deputy collectors, clerks, messengers and janitors, and to rent such quarters, purchase such supplies, equipment, mechanical devices, and other articles as may be necessary for employment or use in the District of Columbia or any collection district in the United States, or any of the Territories thereof: Provided, That no agent paid from this appropriation shall receive compensation at a rate higher than that now received by traveling agents on accounts in the Internal Revenue Service, and no inspector shall receive a compensation higher than $5 a day and $3 additional in lieu of subsistence, and no deputy collector, clerk, messenger, or other employee shall be paid at a rate of compensation higher than the rate now being paid for the same or similar work in the Internal Revenue Service.

Additional Officials. In the office of the Commissioner of Internal Revenue at Washington, District of Columbia, there shall be appointed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury one additional deputy commissioner, at a salary of $4,000 per annum; two heads of divisions, whose compensation shall not exceed $2,500 per annum; and such other clerks, messengers, and employees, and to rent such quarters and to purchase such supplies as may be necessary: Provided, That for a period of two years from and after the passage of this Act the force of agents, deputy collectors, inspectors, and other employees not including the clerical force below the grade of chief of division employed in the Bureau of Internal Revenue in the city of Washington, District of Columbia, authorized by this section of this Act shall be appointed by the Commissioner of Internal

Revenue, with the approval of the Secretary of the Treasury, under such rules and regulations as may be fixed by the Secretary of the Treasury to insure faithful and competent service, and with such compensation as the Commissioner of Internal Revenue may fix, with the approval of the Secretary of the Treasury, within the limitations herein prescribed: Provided further, That the force authorized to carry out the provisions of Section II of this Act, when not employed as herein provided, shall be employed on general internal-revenue work.

Portion of Subdivision "S" of Section IV of the Tariff ActContinuation in Force of the Present Corporation Excise Tax for Certain Purposes.-Provided further, That all excise taxes upon corporations imposed by section thirty-eight, that have accrued or have been imposed for the year ending December thirty-first, nineteen hundred and twelve, shall be returned, assessed, and collected in the same manner, and under the same provisions, liens, and penalties as if section thirty-eight continued in force and effect: And provided further, That a special excise tax with respect to the carrying on or doing of business, equivalent to 1 per centum upon their entire net income, shall be levied, assessed, and collected upon corporations, joint-stock companies or associations, and insurance companies, of the character described in section thirty-eight of the Act of August fifth, nineteen hundred and nine, for the period from January first to February twenty-eighth, nineteen hundred and thirteen, both dates inclusive, which said tax shall be computed upon one-sixth of the entire net income of said corporations, joint-stock companies or associations, and insurance companies, for said year, said net income to be ascertained in accordance with the provisions of subsection G of section two of this Act: Provided further, That the provisions of said section thirty-eight of the Act of August fifth, nineteen hundred and nine, relative to the collection of the tax therein imposed shall remain in force for the collection of the excise tax herein provided, but for the year nineteen hundred and thirteen it shall not be necessary to make more than one return and assessment for all the taxes imposed herein upon said corporations, joint-stock companies or associations, and insurance companies, either by way of income or excise, which return and assessment shall be made at the time and in the manner provided in this Act; but the repeal of existing laws or modifications thereof embraced in this Act shall not affect any act done, or any right accruing or accrued, or any suit or proceeding had or commenced in any civil case before the said repeal or modification; but all rights and liabilities under said laws shall continue and may be enforced in the same manner as if said repeal or modification had not been made. Any offenses committed and all penalties or forfeitures or liabilities incurred prior to the passage of this Act under any statute embraced in or changed, modified, or repealed by this Act may be prosecuted or punished in the same manner and with the same effect as if this Act had not been passed. No Act of limitation now in force, whether applicable to civil causes and proceedings or to the prosecution of offenses or for the recovery of penalties or forfeitures embraced in or modified, changed, or repealed by this Act shall be affected thereby so far as they affect any

suits, proceedings, or prosecutions, whether civil or criminal, for causes arising or acts done or committed prior to the passage of this Act, which may be commenced and prosecuted within the same time and with the same effect as if this Act had not been passed.

T. Invalid Provision not to Affect Others. If any clause, sentence, paragraph, or part of this Act shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of said Act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered.

U. When Effective. That unless otherwise herein specially provided, this Act shall take effect on the day following its passage. Approved 9:10 P. M., October 3, 1913.

INSTRUCTIONS OF THE UNITED STATES TREASURER REGARDING THE INCOME TAX.

Regulations regarding the deduction of the Income Tax at the source on interest maturing on bonds, notes and other similar obligations of corporations, joint-stock companies or associations, and insurance companies under the provisions of Section 2 of the Act of October 3, 1913:

Tax to be Deducted at Source.-Under the Income Tax Law enacted October 3, 1913, a tax of one per cent, designated in the law as the normal tax, shall be deducted at "the source," beginning November 1, 1913, from all income accruing and payable to

Every citizen of the United States whether residing at home or abroad, and to

Every person residing in the United States though not a citizen thereof which may be derived from interest upon bonds and mortgages or deeds of trust or other similar obligations, including equipment, trust agreements and receivers' certificates, of corporations, joint-stock companies or associations, and insurance companies, although such interest does not amount to $3,000, excepting only the interest upon the obligations of the United States or its possessions, or a State or any political subdivision thereof.

The term "debtor" as hereinafter used shall be construed to cover all corporations, joint-stock companies or associations, and insurance. companies.

When Tax shall be Withheld by Debtor.-For the purpose of collecting this tax on all coupons and registered interest originating or payable in the United States the source shall be the debtor (or its paying agent in the United States), which shall deduct the tax when same is to be withheld and no other bank, or trust company, banking firm or individual taking coupons or interest orders for collection, or otherwise, shall withhold the tax thereon; provided, that all such coupons or orders for registered interest are accompanied by certificates of owner

ship, signed by the owners of the bonds upon which the interest matured. These certificates shall be in the forms hereinafter prescribed, and each separate certificate shall be made out by the owner of the bonds for the coupons or interest orders for each separate issue of bonds or obligations of each debtor.

When Tax shall be Withheld by First Collecting Agency.-If, however, the coupons or interest orders are not accompanied by certificates as prescribed above, the first bank, trust company, banking firm, or individual, or collecting agency receiving the coupons or interest orders for collection, or otherwise, shall deduct and withhold the tax and shall attach to such coupons or interest orders its own certificate, giving the name and address of the owner, or the person presenting such coupons or interest orders, if the owner is not known, with a description of the coupons or interest orders; also setting forth the fact that they are withholding the tax upon them; whereupon the debtor shall not again withhold the tax on said coupons or interest orders, but in lieu thereof shall deliver to the government the certificate of such bank, trust company, etc., which is withholding such tax money.

Any corporation, collecting agency, or person first receiving from the owner any interest coupons or orders for the collection of registered interest, and to whom the certificates above provided for are delivered, should require the persons tendering such coupons or orders for registered interest, to satisfactorily establish their identity.

Payment of Registered Interest by Debtors.-The debtor whose bonds may be registered both as to principal and interest shall deduct the normal tax of one per cent from the accruing interest on all bonds before sending out checks for said interest to registered owners or before paying such interest upon interest orders, signed by the registered holders of said bonds until there shall be filed with said debtor or its fiscal agent (and not later than thirty days prior to March 1st) through whom said interest is customarily paid, the proper certificates elaiming exemption from liability for said tax as herein provided, executed as follows:

By a citizen or resident of the United States, the bona fide owner of the registered obligations, who may claim exemption under Paragraph C. Section 2, of the Federal Income Tax Law, or

By corporations, joint-stock companies or associations or insurance. companies, organized in the United States, or organizations, associations, fraternities, etc., which are either taxable or exempt from taxation, as provided in Paragraph G, Subdivision A, of the Act, or

By a bona fide resident and citizen of a foreign country claiming exemption as such.

Designation of Fiscal Agencies.-The "debtor" may appoint paying or fiscal agents to act for it in matters pertaining to the collection of the tax upon filing with the Collector of Internal Revenue for its district a proper notice of the appointment of such agent or agents.

Certificates Claiming Exemption.-If the owners of the bonds are individuals who are citizens or residents of the United States, the afore

said certificates shall accompany the coupons, or, with respect to the interest on registered bonds, shall be filed with the payer of said interest, and such certificates shall describe the bonds and show the amount of coupons attached to or the amount of interest due such owners on registered bonds and the full names and address of the owners, and shall also state whether they claim or do not claim exemption from taxation at the source provided for in Paragraph C of Section 2 of the Federal Income Tax Law ($3,000 and under certain conditions $4,000) as to the income represented by such coupons or interest.

The certificates shall also show the amount, if any, of exemption claimed and the date of signature.

The form of certificate to be used for this purpose shall be substantially as follows:

Form of Certificate to be Presented With Coupons or Interest Orders Stating Whether or not Exemption is Claimed Under Paragraph C, Section 2, of the Federal Income Tax Law.

......

bonds from which were 191...., amount

($......) in bonds of the denominations of ...... dollars ($......) each, Nos. ...... of the ...... known as detached the accompanying coupons, due ing to ...... dollars ($......), or upon which there matured.... 191... dollars ($......) of registered interest.

I do (or do not) now claim with respect to the income represented by said interest the benefit of a deduction of ...... dollars ($.................) allowed under Paragraph C, Section 2, of the Federal Income Tax Law, my total exemption thereunder being

.....

dollars.

(Name)....
(Address)

Whenever interest coupons accompanied by a certificate of an individual who is a citizen or resident of the United States as aforesaid, are presented to a debtor or its fiscal agent for payment, or whenever interest is payable to such individual on a bond registered as to both principal and interest, the debtor or its fiscal agent shall deduct and withhold the amount of the. normal tax, except to the extent that exemption is claimed in the certificate of ownership in the form herein prescribed.

Where the interest to be paid is registered, the same form of certificate shall be used where exemptions are claimed, except that it shall be filed with the debtor at least five days before the due date of such interest.

By Whom Signed. These certificates must be signed by the claimants with their full names and contain their postoffice and street addresses, also the date when signed.

Duly authorized agents, trustees acting in a trust capacity, etc., may sign such certificates for the persons for whom they act.

Organizations Whose Interest Coupons are not Taxed at the Source. If the owners of the bonds are corporations, joint-stock com