Background Information
The provisions of the Wilson-Gorman Tariff Act of 1894 required that, for a five-year period, any "gains, profits and incomes" in excess of $4,000 would be taxed at 2%. So, in compliance with the Act, the New York-based Farmers' Loan & Trust Company announced to its shareholders that it would not only pay the tax, but also provide to the collector of internal revenue in the Department of the Treasury the names of all people for whom the company was acting and thus were liable for being taxed under the Act.
Charles Pollock was a Massachusetts citizen who owned only ten shares of stock in the Farmers' Loan & Trust Company. He sued the company to prevent the company from paying the tax. Pollock lost in the lower courts but finally appealed to the United States Supreme Court, which agreed to hear the case.
Arguing for the plaintiff Pollock was Joseph Choate, one of the most eminent Wall Street lawyers of his day.
Read more about this topic: Pollock V. Farmers' Loan & Trust Co.
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