Solution Manual for Concepts in Federal Taxation 2013

20th Edition by Murphy Higgins ISBN 1133189369

9781133189367
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Chapter 2

Income Tax Concepts

2013
Edition Topic Status

Questions
1 Income tax as a system Unchanged

2 Ability-to-pay concept Unchanged

3 Arm’s-length transaction concept Unchanged

4 Relationship of arm’s-length concept and related party construct Unchanged

5 Pay-as-you-go concept Unchanged

6 Taxable entity versus conduit entity Unchanged

7 Tax benefit rule Unchanged

8 Accounting methods Unchanged

9 Capital recovery concept/income recognition Unchanged

10 Basis for calculation of gross income Unchanged

11 Capital gain versus ordinary income Unchanged
 12 Constructive receipt doctrine Unchanged

13 Wherewithal-to-pay concept versus ability-to-pay concept Unchanged

14 Application of business purpose concept to determine Unchanged deductions

15 Capital expenditures Unchanged

16 Legislative grace concept/difference in application to income and Unchanged

deductions

17 Capital recovery concept/difference in application to income and Unchanged

deductions

Problems
18 Ability-to-pay concept - four scenarios Unchanged

19 Ability-to-pay concept - four scenarios Unchanged

20-CT Calculation and comparison of tax paid by single versus married Unchanged
taxpayer/discuss ability-to-pay concept

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part

2-1

21-CT Ability-to-pay concept - rationale for difference in tax paid

22 Related parties - individuals, corporations, partnership

23 Related parties - corporations and partnerships Unchanged

24-COMM Related party sale - corporations controlled by same individuals Unchanged

25 Entity concept - segregation of income and expenses Unchanged

26 Entity concept - segregation of income and expenses Unchanged

27 Taxation of conduit entities Unchanged

28 Taxability of corporation versus S corporation Unchanged

29-COMM Use of entities Unchanged

30 Partnership income taxation Unchanged

31 Assignment of income Unchanged

32-COMM Assignment of income Unchanged

33 Income recognition - cash versus accrual Unchanged

 34 Income recognition - cash versus accrual Unchanged

35 Tax benefit rule with an application of state tax refund Unchanged

36 Tax benefit rule Unchanged

37 Substance-over-form application to a loan Unchanged

38 Identification of concepts with actual tax treatments Unchanged

39 Identification of concepts with actual tax treatments Unchanged

40 Calculation of gain/loss on sale of depreciable assets Unchanged

41 Long-term capital gains - maximum tax rate Unchanged

42 Capital losses - effect of annual limitation Unchanged

43 Realization concept - four scenarios Unchanged

44 Realization concept - four scenarios Unchanged

45-CT Claim of right Unchanged

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly a cessible website, in whole or in part

46 Claim of right - four scenarios

47 Claim of right - four scenarios

48 Constructive receipt - contrasting treatments Unchanged

49 Constructive receipt - three scenarios Unchanged

50 Realization-provide rationale for five scenarios Unchanged

51-CT When should income be recognized Unchanged

52 Income recognition - provide rationale for four scenarios Unchanged

53 Mixed-use expenditures -home office Unchanged

54 Deduction concepts - provide rationale for four scenarios Unchanged

55 Deduction concepts - provide rationale for four scenarios Unchanged

56-COMM Business purpose Unchanged

57 Differences in treatment of expenses/business versus personal Unchanged

58-CT Differences in treatment of personal/ investment/ business loss Unchanged

59 Calculation of loss on casualty/effect on basis Unchanged

 60 Capital expenditures - four scenarios Unchanged

61 Basis - four scenarios Unchanged

62-CT Timing of deductions - cash versus accrual Unchanged

IID-63 Related parties - effect of transactions Unchanged

IID-64 Application of entity concept and related parties to 100% owned Unchanged
corporation

IID-65 Assignment of income/substance-over-form Unchanged

IID-66 Deductibility of expenses – substance over form Unchanged

IID-67 Income realization Unchanged

IID-68 Claim of right Unchanged

IID-69 Constructive receipt Unchanged

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part

IID-70 Deductibility of mixed-use expenses

IID-71 Mixed-use expenditures - vacation home

72 RIA Research Exercise Unchanged

73 RIA Research Exercise Unchanged

74 INTERNET Unchanged

75 INTERNET Unchanged

76 Research Problem Unchanged

77 Research Problem Unchanged

78-TFP Tax Forms Problem – Preparation of 1040EZ Unchanged

79-DC Deductibility of oil restoration costs/compare financial accounting Unchanged with

tax accounting

80-TPC Substance-over-form application to sale of property Modified

81-TPC A 3-year projection of the tax effect of using a corporation versus Unchanged
a partnership for a new business
 82-EDC Possible under reporting of S corporation income - application of Unchanged SSTS
#3 and SSTS #1

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly a cessible website, in whole or in part
 CHAPTER 2

INCOME TAX CONCEPTS

DISCUSSION QUESTIONS

1. This chapter compared the operation of the income tax system with the operation of other
systems we have devised to govern our everyday lives. Choose an example of a system you
deal with in your everyday life, and explain part of its operation in terms of concepts, constructs,
and exceptions to the general concepts and constructs.

There are several possibilities for student response to this problem. The key point is that they
identify a system, a concept underlying the system with a related construct, and an
exception to the concept. For example, the University Library operates under the general
concept that everyone should have access to the materials in the library. A construct
related to this concept is that some materials may be checked out for a period of time
(two weeks for example), while other types of materials may not be checked out at all
(the exception to the construct). Another exception to the check-out rules may be made
for faculty: faculty may have longer check-out periods and may be able to check out
materials that other users cannot.

2. The chapter stated that the ability-to-pay concept is fundamental to the operation of the income
tax system. What is the ability-to-pay concept, and what two basic aspects of the income tax
system are derived from the concept? What might the tax system be like without this concept?

The ability-to-pay concept states that the tax paid should be related to the amount that the
taxpayer has to pay the tax. This concept is implemented by using taxable income
(income net of deductions) as the tax base for figuring the tax. This gives recognition to
differing levels of income as well as differing levels of deductions by each taxpayer. The
second aspect is the use of progressive tax rates in the calculation of the tax. This rate
structure imposes lower tax rates on lower income levels while taxing higher levels of
income at higher rates.

Without this concept, the income tax could be very different. First, a different tax base could
be used, such as a tax on all income received. In addition, the tax rate structure might
not be progressive. For example, a tax on all income received might be subject to a
single tax rate (proportional tax structure).

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly a cessible website, in whole or in part

2-5

Chapter 2: Income Tax Concepts 3. What is an arm’s-length transaction? What is

its significance to income taxation?

An arm’s-length transaction is one in which the parties to the transaction bargain in good faith
for their individual benefit, not for the mutual benefit of the group. That is, the price of
the transaction is a fair market value.

The importance for income taxation is that transactions not made at arm’s-length are usually
not given their intended tax effect. This has led to the related party rules which define
situations in which entities do not bargain at arm’s-length. Special rules for transactions
between related parties have been developed to discourage such transactions.

4. Explain how the related party construct and the arm’s-length transaction concept interact.

Related parties are defined as certain relatives (children, parents, grandparents) and other
relationships in which one party controls the action of the other party (e.g., greater than
50% ownership of a corporation). In such cases, there is an incentive to cooperate to
structure transactions that have favorable tax effects for the transaction group (i.e.,
related parties may enter into transactions that they would not otherwise enter into with
an unrelated party). Because of this potential for structuring transactions that could lead
to abuse, related parties are deemed not to transact at arm’s-length.

5. Why is the pay-as-you-go concept important to the successful operation of the income tax
system? What other types of taxes are based on this concept?

Because the U.S. income tax system is based on voluntary compliance, it is important that the
system have features that encourage compliance. By having amounts withheld from a
taxpayer’s income as it is earned and requiring a taxpayer not subject to withholding to
make estimated tax payments, the system encourages taxpayers to file returns. That is,
without such a requirement, taxpayers would face very large tax payments when filing
their annual returns. Many taxpayers could not afford to make such a large lump-sum
payment, leading to an incentive either to not file, or to greatly understate their income.
The pay-as-you-go system leaves taxpayers with either a relatively small amount of tax
due or a refund of a portion of their prepaid taxes. This encourages taxpayers to file
their returns and report the correct amount of income.

The most familiar type of tax that is based on the same concept is the sales tax. State income
taxes and Social Security/Self-Employment taxes are also subject to withholding and
estimated payment requirements. In addition, other types of user taxes are typically
collected at point of sale. This would include gasoline taxes, taxes on luxury autos, and
utility taxes.

Chapter 2: Income Tax Concepts

6. What is the difference between a taxable entity and a conduit entity?

A taxable entity is an entity that must pay tax on its income. The two primary taxable
entities are individuals and corporations. The owners of a corporation do not pay
the income tax on the corporation’s taxable income. However, the owner’s are taxed
when the corporation distributes income, in the form of dividends, to the owners.
A conduit entity is a tax reporting entity that reports its results to the government, but does
not pay tax on its income. Rather, the conduit entity’s income flows through to its
owners, who report their share of the conduit entity income on their returns. Thus, the
owners of the conduit entity pay the tax on the conduit’s income, not the conduit entity.

7. Why is the tax benefit rule necessary? That is, which concept drives the need for this construct?
Explain.

The tax benefit rule is necessary because of the annual accounting period concept
requirement that the events of each tax year are to stand alone. Because prior year’s
returns are generally not subject to adjustment under this concept, there is a need for a
construct to determine the proper treatment of items previously deducted that are
recovered in a subsequent year.

8. What are the two basic methods of accounting that may be used by taxpayers? How do the
two basic methods differ?

The two basic accounting methods that are acceptable for tax purposes are the cash method
and the accrual method. The basic difference between the two methods is the criteria
used to determine the timing of the recognition of income and expenses.

The cash method recognizes income when cash or its equivalent is received. Expenses are
deducted when they are paid. That is, it is basically a cash flow system (although capital
expenditures cannot be deducted in total in the period in which they are paid).

The accrual method recognizes income when it is earned (the receipt of cash or its equivalent
is not a factor). Expenses are deducted when all events have occurred that fix the
liability for the payment and the amount of the payment can be reasonably estimated.
The payment of the expense is not a factor for accrual basis taxpayers.

9. What is the effect of the capital recovery concept on income recognition?

The capital recovery concept states that no income is recognized until all capital invested in
an asset has been recovered. Thus, when assets are sold, no income results unless the
sales price is greater than the capital invested in the asset. If the sales price is less than
the amount of capital invested, then the taxpayer has sustained a loss. The amount of
the loss is equal to the capital that was not recovered through the disposition of the
asset.

Chapter 2: Income Tax Concepts

10. Chapter 1 discussed how gross income is equal to all income received, less exclusions. Which
concepts form the basis for this calculation of gross income? Explain.

The all-inclusive income concept provides that all income received is taxable. The legislative
grace concept allows Congress to provide relief from taxes through exclusions and
deductions. Thus, the calculation of gross income is a combination of the two concepts.
11. What is capital gain income? How is it different from ordinary income?

Capital gain income (loss) results from the sale or other disposition of a capital asset. For
individuals, capital assets consist of stocks, bonds, other investment assets, and
personal use property.

Net long-term capital gains of individuals are given special treatment - the tax rate on a net
long-term capital gain is 15%. Net capital loss deductions are limited to $3,000 per year
for individuals. Corporations are only allowed to deduct capital losses against capital
gains.

12. Why does the doctrine of constructive receipt apply only to cash basis taxpayers?

The constructive receipt doctrine is used to determine when a taxpayer has received income.
This is critical for the cash basis taxpayer who recognizes income when it is received.

An accrual basis taxpayer recognizes income when the income has been earned. Recognition
is not contingent upon receipt of the income. Therefore, the constructive receipt
doctrine does not affect income recognition by accrual basis taxpayers.

13. How is the wherewithal-to-pay concept different from the ability-to-pay concept?

The ability-to-pay concept is a general concept that states that each taxpayer should pay a
taxed based on his or her ability to be able to pay the tax. That is, those taxpayers with
the most income should pay relatively more tax. This concept leads to such things as
progressive rate schedules, exemption deductions, etc., that are system-wide
applications.

The wherewithal-to-pay concept is an income recognition concept. It states that the tax on an
income item should be levied in the period in which the taxpayer has the means to pay
the tax. It overrides accounting methods and other concepts (realization) and requires
recognition of income items in the period that the taxpayer has resources from the
transaction to pay the tax. Thus, the concept is applied to specific transactions and is
not a system-wide application.

14. Explain how the business purpose concept provides the basis for determining which expenses
are deductible.

To deduct an expenditure, the business purpose concept requires that the expenditure have
a business or economic purpose that exceeds any tax avoidance motive. A business or
economic purpose is one that involves a profit-seeking activity. The tax law embodies
this concept by allowing the deduction of trade or business expenses and production of
income expenses (i.e., investment expenses), both of which involve profitseeking
activities. Personal expenditures (except those specifically allowed as itemized
deductions) and expenditures that are primarily motivated by tax avoidance are not
deductible.
Chapter 2: Income Tax Concepts
15. What is a capital expenditure?

A capital expenditure is any expenditure that benefits more than one annual accounting
period. That is, the usefulness of the expenditure extends substantially beyond the
end of the tax year in which the expenditure is made. Because of the multiperiod
benefit, capital expenditures generally are not deductible in full in the period they
are paid or incurred. Rather, they must be capitalized as an asset and allocated to
the periods of benefit. Common capital expenditures include fixed asset purchases
(e.g., land, buildings, equipment), prepaid expenses, and purchases of securities.

16. The legislative grace concept is both an income concept and a deduction concept. Explain how
the application of the concept differs for income items and deduction items.

The legislative grace concept states that any tax relief provided is the result of a specific act
of Congress that must be strictly applied and interpreted. Exclusions from income and
deduction allowances are both forms of tax relief and therefore, result from the legislative
grace concept.

The difference in the application of the concept to income and deduction items is the approach
taken in analyzing what is included in income and what is deductible. The allinclusive
income concept states that all income received (earned) is taxable absent some specific
provision in the tax law exempting it from tax. Thus, the approach to income is to
assume that everything is taxable and to look for those provisions that exclude income
from tax (i.e., where legislative grace has provided tax relief).

Deductions are just the opposite. The business purpose concept states that an expenditure
must have a profit motive in order to be deductible. Therefore, when approaching
deductions, the assumption is that items are not deductible and specific provisions must
be found that allow the deduction (i.e., where legislative grace has provided tax relief).

17. The capital recovery concept is both an income concept and a deduction concept. Explain how
the application of the concept differs for income items and deduction items.

The capital recovery concept states that there is no income until all capital invested has been
recovered. The income side of the concept allows the recovery of capital investment
against the selling price of assets in determining the amount of income (loss) from the
disposition of assets.

The deduction side of the concept is a limit on the amount of the deduction. Because income
results from an excess of income over expenses, the maximum amount of any deduction
is the amount of capital invested in the deduction. Therefore, expenses are deducted at
their cost to the taxpayer, not at some other value (e.g., replacement cost, current market
value).
PROBLEMS

18. Which of the following are based on an ability to pay? Explain.

a. State Y collects a sales tax of 5% on all purchases of goods and services.

A flat rate tax on the purchase of all goods and services is not a tax that is
based on the amount that the taxpayer can afford to pay. It is based on the
taxpayer’s consumption of goods and services, which is not specifically
tied to income levels. That is, there is some minimum level of purchases
that all taxpayers incur, regardless of their income level.

b. State X collects a sales tax of 5% on all purchases of goods and services but
gives low-income families a tax credit for sales taxes.

The use of a tax credit for low income families would make the sales tax less
regressive. Properly constructed, such a tax credit could move the sales
tax closer to a tax based on a taxpayer’s ability to pay.

c. Students at State University are given free parking in designated lots. Faculty
and staff members must pay $125 per year for parking at State University.

The fee structure is based somewhat on ability to pay regarding students

versus faculty and staff. However, within each of these categories various
individuals would have greater ability to pay than others. For example, the
University President would have a greater ability to pay than a
maintenance worker. Thus, the tax is not totally based on ability to pay.

d. Barton City charges all customers a flat monthly rate of $10 for garbage pickup.

Flat rate charges without regard to income levels are not based on ability to
pay. All taxpayers pay the fee without regard to their income level.

19. Which of the following are based on an ability to pay? Explain.

a. Local County assesses property taxes at the rate of 1% of assessed value.

Because the property tax is based on the value of the property and is not
related to the taxpayer’s income, it is not based on each taxpayer’s ability
to pay the tax. If it is assumed that there is a correlation between the value
of a taxpayer’s property and his/her income, then the tax takes on the
features of a proportional tax. However, proportional taxes do not
 consider ability to pay because each taxpayer pays the same rate based
on his/her income.

b. The university library lets all students, faculty, and staff members check out books
free. Students who do not return books by the due date are fined $1 for each
day the book is late. Staff members are fined 50 cents for each day a book is late.
Faculty members are not fined when they return books late.

The book fines are not based on ability to pay. Under this fine structure,
those with the least ability to pay, students, pay more than those with the
greatest ability to pay, faculty.

c. The country of Lacyland assesses an income tax based on the following

schedule:

Taxable Income Income Tax

$ -0- to $20,000 20% of taxable income
$ 20,001 to $60,000 $ 4,000 + 15% of taxable income in excess of $20,000 $ 60,001
and above $10,000 + 10% of taxable income in excess of $60,000

This is a regressive tax rate structure - the marginal tax rate is declining as
income is increasing (average tax rate is greater than the marginal tax
rate). Although higher income taxpayers are paying more tax, they are
paying at a lower tax rate. The tax is not based on ability to pay because
higher income taxpayers are presumed to be able to pay tax at a higher
marginal rate than those with lower incomes.

d. State Z imposes a 10-cent-per-gallon tax on gasoline but gives low-income

taxpayers a tax credit for gasoline taxes paid.

A 10-cent per gallon gasoline tax is a proportional tax. Proportional taxes do

not consider ability to pay because all taxpayers pay the same tax rate.
Giving low income taxpayers a tax credit for the taxes they pay provides a
rate differential between high and low income taxpayers and makes the tax
at least partially based on ability to pay. However, for the range of
taxpayers who do not get credit for the gasoline tax they pay, the tax is not
based on ability to pay. Very high income taxpayers will pay the same tax
rate as high income taxpayers.

20. Sheila, a single taxpayer, is a retired computer executive with a taxable income of
$90,000 in the current year. She receives $30,000 per year in tax-exempt
municipal bond interest. Adam and Tanya are married and have no children.
Adam and Tanya’s $90,000 taxable income is comprised solely of wages they
earn from their jobs. Calculate and compare the amount of tax Sheila pays with
Adam and Tanya’s tax. How well does the ability-to-pay concept work in this
situation?
 Sheila’s tax is $18,661. Adam and Tanya’s tax is $14,560.

Single rate schedule:

Sheila $17,442.50 + [28% x ($90,000 - $85,650)] = $18,661

Married rate schedule:

Adam & Tanya $9,735.00 + [25% x ($90,000 - $70,700)] = $14,560

The difference in the tax rate schedules for single and married taxpayers
reflects the greater ability to pay tax by single taxpayers at the same
income level as married taxpayers. However, in this case, the rate
schedules do not adjust for the difference in economic incomes. Sheila’s
economic income is $120,000 ($90,000 taxable income + $30,000
taxexempt income). Her effective tax rate on this income is 15.55%
($18,661 ÷ $120,000) versus a 16.18% ($14,560 ÷ $90,000) effective tax
rate on Adam and Tanya’s economic income. Therefore, even though the
tax rate structures reflect the ability-to-pay concept, other provisions in the
tax law that exclude items from income serve to negate the effect of the tax
rate structures.

21. Andrew and Barbara each receive a salary of $80,000. Neither Andrew nor
Barbara has any other source of income. During the current year, Barbara paid
$800 more in tax than Andrew. What might explain why Barbara paid more tax
than Andrew when they both have the same income?

Factors that could cause taxpayers with the same amount of income to pay
different amounts of tax are:

1. Marital Status - If one taxpayer is married and the other is single, the
single individual will pay more tax on the same amount of income than
a married couple.

2. Deductions - If one taxpayer has more allowable deductions, then he

or she will pay less tax on the same total income. This could be the
result of either one taxpayer having strictly more deductible items, or
one taxpayer itemizing their allowable personal deductions and the
other taking the standard deduction.

3. Dependents - If one taxpayer has more dependents than the other

taxpayer, then his or her taxable income will be less by the amount of
the additional exemptions, resulting in less tax paid.

4. Tax Credits - If one taxpayer has tax credits that the other does not (or
more than the other), then his or her tax will be less.
22. Which of the following are related parties:

Related parties are defined to include members of an individual’s family

(ancestors, lineal descendants, and brothers and sisters) and entities in
which the taxpayer effectively owns more than a 50% interest.

a. Harvey and his sister Janice?

A sister is a related party.

b. Harvey and the Madison Partnership? Harvey owns a 60% interest in the
partnership. Three of Harvey’s friends own the remaining partnership interest.

Because Harvey owns more than 50% of partnership, he and the Madison
Partnership are related parties.

c. Harvey and his grandfather Maurice?

A grandfather is an ancestor; Harvey and Maurice are related parties.

d. Harvey and Noti Corporation? Harvey owns 40% of Noti Corporation. Three
unrelated parties own 20% each.

Harvey does not own (directly or indirectly) more than 50% of the corporation;
Harvey and Noti are not related parties.

e. Harvey and his uncle Elmer?

An uncle is not a related party; Harvey and Elmer are not related parties.

23. In each of the following cases, determine whether Inez is a related party:

a. Inez owns 500 shares of XYZ Corporation’s common stock. XYZ has 50,000
shares of common stock outstanding.

Inez and XYZ are not related parties. For a corporation to be a related party,
the taxpayer must own more than 50% of the stock of the corporation. In
this case, Inez owns only 1% (500 ÷ 50,000) of XYZ Corporation.

b. Inez owns a 40% interest in the Tetra Partnership. The other 60% interest is
owned by 3 of Inez’s friends.
Another random document with
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The Project Gutenberg eBook of Memoirs of the
life of David Rittenhouse, LLD. F.R.S., late
president of the American Philosophical Society,
&c
 This ebook is for the use of anyone anywhere in the United
States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it away
or re-use it under the terms of the Project Gutenberg License
included with this ebook or online at www.gutenberg.org. If you
are not located in the United States, you will have to check the
laws of the country where you are located before using this
eBook.

Title: Memoirs of the life of David Rittenhouse, LLD. F.R.S., late

president of the American Philosophical Society, &c
interspersed with various notices of many distinguished
men : with an appendix, containing sundry
philosophical and other papers, most of which have not
hitherto been published

Author: William Barton

Release date: December 2, 2023 [eBook #72283]

Language: English

Original publication: Philadelphia: Edward Parker, 1813

Credits: KD Weeks, The Online Distributed Proofreading Team

at https://www.pgdp.net (This file was produced from
images generously made available by The Internet
Archive)

*** START OF THE PROJECT GUTENBERG EBOOK MEMOIRS

OF THE LIFE OF DAVID RITTENHOUSE, LLD. F.R.S., LATE
PRESIDENT OF THE AMERICAN PHILOSOPHICAL SOCIETY, &C
***
 Transcriber’s Note:
Please consult the end notes for a discussion of the
handling of textual notes, and any other issues that arose
during the preparation of this transcription.
The front cover, which contained no text, has been
modified by adding a simplified version of the title page,
and, as so modified, is added to the public domain.
Any corrections are indicated as hyperlinks, which will
navigate the reader to the corresponding entry in the
corrections table in the note at the end of the text.
 MEMOIRS

OF THE LIFE

OF

DAVID RITTENHOUSE, LLD. F.R.S.

LATE PRESIDENT OF THE AMERICAN PHILOSOPHICAL SOCIETY, &c.

INTERSPERSED WITH

VARIOUS NOTICES OF MANY DISTINGUISHED MEN:

WITH

AN APPENDIX,
CONTAINING

SUNDRY PHILOSOPHICAL AND OTHER PAPERS,

MOST OF WHICH HAVE NOT HITHERTO BEEN PUBLISHED.

BY WILLIAM BARTON, M. A.
COUNSELLOR AT LAW;

Member of the American Philosophical Society, the Mass. Hist. Society, and the
Royal Economical Society of Valencia, in Spain.

PHILADELPHIA:
 PUBLISHED BY EDWARD PARKER, NO. 178, MARKET-STREET.

W. Brown, Printer, Church-Alley.

1813.
DISTRICT OF PENNSYLVANIA, TO WIT:
BE IT REMEMBERED, That on the ninth day of October, in the
thirty-eighth year of the independence of the United States of
America, A. D. 1813, William Barton of the said district, hath
deposited in this office the Title of a book, the right whereof he
claims as Author, in the words following, to wit:
“Memoirs of the Life of David Rittenhouse, L. L. D. F.R.S, late
President of the American Philosophical Society, &c. Interspersed
with various notices of many distinguished men: with an Appendix,
containing sundry philosophical and other papers, most of which
have not hitherto been published. By William Barton, M. A.
Counsellor at Law; Member of the American Philosophical Society,
the Mass. Hist. Society, and the Royal Economical Society of
Valencia, in Spain.”
In conformity to the act of the Congress of the United States,
intituled, “An act for the encouragement of learning, by securing the
copies of maps, charts and books, to the authors and proprietors of
such copies during the times therein mentioned.”—And also to the
act entitled, “An act supplementary to an act, entitled, “An act for the
encouragement of learning, by securing the copies of maps, charts,
and books, to the authors and proprietors of such copies during the
times therein mentioned,” and extending the benefits thereof to the
arts of designing, engraving, and etching historical and other prints.”

D. CALDWELL,
Clerk of the District of Pennsylvania.
 PREFACE.

Agreeably to the plan on which the following memoirs have been

conducted, it will be perceived, that they contain a great variety of
matter; of which, some particulars have a remote, others merely an
incidental connexion, with the chief object of the work. There may
perhaps be some readers, to whom the introduction of such matters
as the University of Pennsylvania and the Medical School connected
with it, the Pennsylvania Hospital, the Philadelphia Library, and the
like, into the Life of Rittenhouse, will, on a cursory view, seem to
have little or no affinity to that object. But when it is considered, that
this work is designed to comprehend Memoirs, not only of
Rittenhouse personally, but of several literary, scientific, and other
public institutions, as well as of many eminent men, with which his
individual history and the annals of his time were in various ways
associated, it is presumed, that the slight sketches which have been
taken of those matters, in passing along, will neither prove foreign to
the nature of the present undertaking, nor uninteresting in
themselves. As a citizen of Pennsylvania; as an inestimable public
and private character; as a distinguished son of science, of great
probity and extensive usefulness in society; in all these points of
view, the History of Dr. Rittenhouse may be contemplated, as holding
a relationship with almost every object connected with science and
the arts, in his day, that could in any wise contribute to the well being
of mankind in general, and his native country in particular.
Conspicuous and eminently meritorious as he was, yet an insulated
account of his talents, his virtues, and his personal services,—a bare
specification of such qualities and merits as he possessed,
abstracted from a due consideration of the state of society and
circumstances resulting from it, taken in connexion with them, during
the same period,—would not be equally intelligible and instructive;
and, consequently, must prove less useful. For these reasons, the
Memorialist has pursued that course which he conceives to be
perfectly congenial with the main design of his work; as best
calculated to promote its general usefulness, and most suitably
adapted to render it interesting, even to those who read for
amusement solely.

In the adoption of this plan, the writer has been chiefly influenced
by a desire to illustrate the history, genius and character of the times,
which his Memoirs embrace; together with the progress and
improvement of literature, science and the arts, within the same
compass, more especially in this country; and this consideration has
obviously led him to introduce, in conjunction with those objects, as
well as with the Life of the great American Philosopher, various
notices of many persons distinguished for their talents and merit, not
only in our own time, but at different periods in the annals of science.
He has thought it right to rescue from oblivion—to commemorate in
this way, if not to consecrate, the names of some men in this country,
more especially, who deserve to be ranked among the worthies of
America. All this the writer has done, too, in conformity to the mode
prosecuted by some of the most judicious biographers and
memorialists, together with other writers of the same class: It is
believed to be a manner of treating the interesting subjects, on which
the pens of such authors have been employed, which, while it
renders their works more pleasing, greatly increases their
usefulness.—If, therefore, some of the matter which has been
introduced into the present work should, at first sight, appear
irrelative, and even unimportant, the Memorialist nevertheless
flatters himself, that, on reflection, nothing will be deemed really so,
how remotely soever it may seem, on a transient view of the subject,
to be connected with the principal design of the undertaking;
provided it has a tendency to illustrate the great objects he was
desirous of accomplishing.[I1]

The diversity of the materials which are, by these means, blended

with the biographical account of Dr. Rittenhouse, in the Memoirs now
presented to the world, made it expedient, in the opinion of the
writer, to have recourse to the free use of notes, for the purposes of
illustration, reference, and explanation. In a work of such a
complexion—constituting a book composed of very various
materials, designed to elucidate and inform, as well as to please—it
became, in fact, necessary to throw a large portion of that matter into
the form of notes; in order to avoid, by numerous digressions on
subjects arising out of the primary object of the work, too much
disjointing of the text. There are persons, no doubt, by whom this
course will be disapproved. The able and learned author of the
Pursuits of Literature has been accused by some critics—while
others, who have no pretensions to those qualifications which entitle
a man to exercise the functions of a critic, have even affected to
laugh at him—for the multiplicity, the variety, and the length of the
notes, which he has appended to that poem. But its being a satirical
poem, is the circumstance to which may be fairly attributed the
censorious cavils which his work excited: his satire was felt; and it
roused the spleen of those who were its objects, and their partizans.
The present work, however, is far from being intended to satirise any
one; its author has no such object in view: for, although he has, in
some instances, expressed his disapprobation of certain principles,
theories, and even measures, which he believes to be not only
repugnant to true science, but destructive of both private and social
happiness—he has refrained as far as possible from personal
censure;—he would much rather be engaged in the functions of an
eulogist, than those of a censor. The numerous notes the
Memorialist has employed—many of them, too, pretty long—will not
therefore, he presumes, be objected to, on the ground of personality
or supposed ill-humour. He has introduced them into his Memoirs,
because he believed them to be not only useful, but peculiarly well
adapted to a work of this nature, and suited to answer the general
scope of its design. The author may then say, in the words of the
poetical writer just mentioned—as an apology for the frequency and
copiousness of the notes annexed to these Memoirs;—“I have made
no allusions which I did not mean to explain. But I had something
further in my intention. The notes are not always explanatory; they
are of a structure rather peculiar to themselves: many of them are of
a nature between an essay and an explanatory comment. There is
much in a little compass, suited to the exigency of the times. I
expatiated on the casual subject which presented itself; and when
ancient or modern writers expressed the thoughts better than I could
myself, I have given the original languages. No man has a greater
contempt for the parade of quotation (as such) than I have. My
design is not to quote words, but to enforce right sentiments in the
manner which I think best adapted to the purpose, after much
reflection.”

The method of disposing of the notes, in this work, may be thought

by some to impair the symmetry of the page: but so trivial a defect as
this may be, in the typographical appearance of the book, will, it is
supposed, be amply compensated by the convenience the reader
will experience, in having the annotations, almost always, on the
same pages with their respective references.

In the arrangement of the Memoirs, the author has placed the

incidents and circumstances relating to the Life of Dr. Rittenhouse, in
their chronological order, as nearly as could be conveniently done.

An Appendix,—containing sundry letters and other papers, which

could neither be incorporated with propriety into the text, nor inserted
in marginal notes,—is placed after the conclusion of the Memoirs. In
this part of the work the reader will find, among other interesting
documents, Dr. Rittenhouse’s Oration on the subject of Astronomy,
pronounced before the American Philosophical Society, in the year
1775. The addition of this treatise to the Life of our Philosopher, was
rendered the more proper,—independently of the intrinsic merit of
the performance,—by reason of the pamphlet having had, originally,
a very limited circulation, and its being now out of print. The Notes,
added to this little tract, as well as to some other papers in the
Appendix, by the Memorialist, are designated by the initials of his
name; in order to distinguish the annotations from either the notes
originally attached to them,—or from other matter, in the Text, not
written by himself.
 The author has embellished his work with an elegantly engraved
likeness of Dr. Rittenhouse, executed by an able artist, from a
portrait painted by Mr. C. W. Peale, in-the year 1772,[I2] when our
Philosopher was forty years of age. At that time he wore a wig,—and
was so represented in the picture: but afterwards, when he resumed
the wearing of his own hair, (and which he continued to do during the
remainder of his life,) the portrait was altered accordingly, by Mr.
Peale. The original picture (now in the possession of Mrs. Sergeant,)
bore a strong resemblance to Dr. Rittenhouse, at that period of his
life in which it was taken; and the engraving, prefixed to these
Memoirs, is an excellent copy.

To a portion of the readers of this work, some of the matter it

contains may be thought superfluous,—because already familiar to
them: and, to men of extensive learning and research, much of the
information herein collected may really be so. But to persons of less
erudition and science, the knowledge thus communicated it may be
presumed, will prove in some degree useful; and the writer indulges
a confident belief, that the greater number of his readers will derive
both instruction and gratification, from a perusal of the Memoirs now
offered to their attention.

The favours which the Memorialist has received, in the

communication of sundry papers and some information for this work,
demand his thankful acknowledgments to the contributors. Among
these,—besides those gentlemen occasionally mentioned in the
Memoirs,—the writer returns his thanks to his worthy relatives, Mrs.
Sergeant, Mrs. Waters, and Dr. Benjamin Smith Barton; and also to
the Rt. Rev. Bishop White, Andrew Ellicott, Esq. John Vaughan, Esq.
the Rev. Dr. Samuel Stanhope Smith, Charles Smith, Esq. and the
Rev. Mr. Cathcart. To the friendship and politeness of these very
respectable characters, he holds himself indebted, on this occasion.
[I3]

It has been the earnest desire of the writer, to adhere strictly to

Truth, in every part of his narrative: he has not, therefore, introduced
into his work any thing, as a matter of Fact, which he did not believe
to be well founded. Wherever he has ventured to express an Opinion
of his own, on any subject of importance, it must be left to the
judgment and candour of others to determine, what weight it may be
entitled to.—In the various quotations which appear in his Memoirs,
the writer has endeavoured to observe the utmost fidelity, with
respect to the originals; and all his translations into the English, from
other languages, have been made with a like scrupulous attention to
correctness.—Some errors and inaccuracies have nevertheless, it
may be readily supposed, found their way into the following work;
though the writer trusts they are neither numerous nor very
important: and, as they are wholly unintentional, of whatever
description they may be, he hopes it will not be deemed
presumptuous in him, to claim for them the indulgence of a candid,
liberal, and discerning public.

Lancaster, in Pennsylvania,
April 11, 1813.

I1. The biographer of Rittenhouse entirely coincides with the

compilers of the Encyclopædia Britannica, in opinion, respecting the
utility and propriety of giving an account, in such Memoirs as the
present, of things as well as persons, connected in various ways with
the main object of the work.

In the preface to that useful dictionary of arts, sciences and

miscellaneous literature, are the following observations: the
consideration they merit; is submitted to the good sense of the
reader.

“While one part of our readers,” say the encyclopedists, when

referring to the biographical department of their work, “will regret that
we have given no account of their favourite philosopher, hero, or
statesman, others may be disposed to remark, that we have dragged
from obscurity the names of many persons who were no proper
objects of such public regard. To these we can only reply, that, with
the greatest biographer of modern times, we have long thought that
there has rarely passed a life, of which a faithful narrative would not
be useful; and that in the lives of the most obscure persons, of whom
we have given any account, we saw something either connected
with recent discoveries and public affairs, or which we thought
capable of affording a lesson to great multitudes in similar
circumstances.”—“Between eminent achievements and the scenes
where they were performed, there is a natural and necessary
connexion. The character of the warrior is connected with the fields
of his battles; that of the legislator, with the countries which he
civilized; and that of the traveller and navigator, with the regions
which they explored. Even when we read of the persons by whom,
and the occasions on which, any particular branch of knowledge has
been improved, we naturally wish to know something of the places
where such improvements were made.”

I2. Mr. C. W. Peale painted at the same time another portrait of

him, for himself; which is likewise altered from the original painting. It
has a place in Mr. Peale’s Gallery of Portraits. There is a third, by the
same hand, in the possession of the American Philosophical Society.

Another good picture of Dr. Rittenhouse was also then made, by

Mr. James Peale, for the Rev. Mr. Barton. This (which represents him
with a wig) is now in the possession of John Moore White, Esq. of
New-Jersey, who married Mr. Barton’s youngest daughter.

A pretty good mezzotinto, in a large size,—done from Mr. C. W.

Peale’s painting of our Philosopher,—was executed by Mr. E.
Savage, in the winter of 1796: and since that time, some small
engravings have been made from different pictures of him; but these
do not so well preserve the likeness.

I3. Some interesting information was likewise communicated by

the late Professor Rush. The death of that gentleman having
occurred since the completion of the present work, the author has
inserted a concise biographical notice of him, in the Appendix, in
place of the mention originally made of his name in this preface.
 INTRODUCTION.

The individuals in society, who present to the view of their

cotemporaries, and transmit to posterity, Memorials of illustrious
men,—more especially those of their own country,—discharge
thereby a debt of gratitude: because every man is, directly or
indirectly, interested in the benefits conferred on his species, by
those who enlarge the sphere of human knowledge, or otherwise
promote the happiness of mankind.

But the biographer of an highly meritorious character aims at more

than the mere performance of that duty, which a grateful sense of
obligation exacts from him, in common with every member of the
community, in commemorating the beneficence of the wise and the
good: he endeavours to excite in great and liberal minds, by the
example of such, an ambition to emulate their talents and their
virtues;—and it is these, that, by their union, constitute true
greatness of character.

The meed of applause which may be sometimes, and too often is,
bestowed on meretricious worth, is ever unsteady and fleeting. The
pseudo-patriot may happen to enjoy a transient popularity; false
philosophy may, for a while, delude, if not corrupt, the minds of an
unthinking multitude; and specious theories in every department of
science,—unsupported by experience and untenable on principles of
sound reason,—may give to their projectors a short-lived reputation:
But the celebrity which is coveted by the man of a noble and
generous spirit,—that estimable species of fame, which alone can
survive such ephemera of error as are often engendered by the
vanity of the individual and nurtured by the follies or vices of the
many,—must ever rest on the permanent foundation of truth,
knowledge and beneficence.

Virtue is essentially necessary to the constitution of a truly great

character. For, although brilliant talents are sometimes found
combined with vicious propensities,[1]—the impulse given to men of
this description, often renders their great abilities baneful to society:
they can seldom, if ever, be productive of real public good. Should
eminent talents, possessed by a man destitute of virtue, even take a
right direction in their operation, by reason of some extraordinary
circumstance,—such an event ought never to be calculated on: It is
not the part of common sense,—much less of a cautious prudence,
acquired by a knowledge of mankind,—to expect praise-worthy
conduct from any one, whose predominating passions are bad,
however great may be his capability of doing good.

While, therefore, the mind may view, with a sort of admiration, the
achievements of a magnanimous soldier, it turns with indignation
from the atrocities of a military tyrant: and at the same time that it
may be induced to contemplate even with complacency, at the first
view, the plausible, yet groundless speculations of ingenious
theorists, in matters of science,—still the fallacy of their systems,
when developed by experience, strips them of all their tinseled glare
of merit. Thus, too, the applause which the world justly attaches to
the character of a patriot-hero, deserts the unprincipled ruffian-
warrior, however valiant and successful he may prove: In like
manner, reason and experience expose to the censure of the good
and the derision of the wise, the deleterious doctrines of
metaphysical statesmen and philosophers.[2] Such estimable
qualities as they may possess, in either character, are merged in the
mischievous or base ones, with which they are combined: thus,
infamy or contempt eventually become the merited portion of crime
or of folly, as either one or the other may prevail. A Cæsar,[3] a
Cromwell and a Robespierre, with other scourges of mankind, of like
character, will therefore be viewed as objects of execration by
posterity, while the memories of an Alfred, a Nassau, and a
Washington—a Chatham, a Burke, and an Ames,—will be
venerated, to the latest posterity.

Much of the glory of a nation results from the renown of illustrious

men, among its citizens: a country which has produced many great
men, may justly pride itself on the fame which those individuals had
acquired. The community to which we belong is entitled to such
services as we can render to it: these the patriot will cheerfully
bestow; and, in promoting the honour and prosperity of his country, a
large portion of the lustre which the exertion of his talents shall have
shed upon it, are again reflected on himself.[4]

The cultivator of those branches of natural science which

constitute practical and experimental philosophy;—equally with the
teacher of religion and morals,—extends the beneficial effects of his
researches and knowledge beyond the bounds of his particular
country. Truth is every where the same; and the promulgation of it
tends, at all times and in all places, to elevate to its proper station
the dignity of man. The more extensively, then, true science can be
diffused, the greater will be the means—the fairer will be the rational
prospect, of enlarging the sphere of human happiness. The
philosopher may, pre-eminently, be considered as a citizen of the
world; yet without detracting in any degree from that spirit of
patriotism, which ever stimulates a good man to contribute his
primary and most important services to his own country. There are,
indeed, some species of aids, which are exclusively due to a
community, by all its citizens; and, consequently, such as they are
bound to withhold from other national communities, in certain
contingencies and under peculiar circumstances. But a knowledge of
those truths which lead to the acquisition of wisdom and practice of
virtue, serves to meliorate the condition of mankind generally, at all
times, and under all circumstances;—inasmuch as they greatly
assist in banishing error, with its frequent concomitant, vice, not only
from the more civilized portions of the world, but also by their
inherent influence, from among nations less cultivated and refined.
 The truths promulgated by means of a natural and sublime
philosophy—corresponding, as this does, with the dignity of an
enlightened spirit—must ever emanate from a virtuous heart as well
as an expanded intellect. Hence, the real philosopher,—he whose
principles are unpolluted by the sophisticated tenets of some modern
pretenders to the appellation,—can scarcely fail to be a good man.
Such was the immortal Newton; such were a Boyle, a Hale and a
Barrow,—a Boerhaave, a Stephen Hales and a Bradley; with many
worthies equally illustrious,—whose glories will, for ever, retain their
primitive splendour.

Even the most celebrated sages of antiquity, extremely imperfect

as we know the philosophy of the early ages to have been,
elucidated, by the purity of their lives and the morality of their
doctrines, the truth of the position,—that the cultivation of natural
wisdom, unaided as it then was by the lights of revelation, encreased
every propensity to moral virtue. Such were Socrates, Plato his
disciple, and Anaxagoras; who flourished between four and five
centuries before the Christian era.

The life of Socrates, who is styled by Cicero the Father of

Philosophers, afforded a laudable example of moderation, patience,
and other virtues; and his doctrines abound with wisdom.
Anaxagoras and Plato united with some of the nobler branches of
natural science, very rational conceptions of moral truth. Both of
them had much higher claims to the title of philosophers, than
Aristotle, who appeared about a century afterwards. This
philosopher, however,—for, as such, he continued for many ages to
be distinguished in the schools,—was, like Socrates, more a
metaphysician than an observer of the natural world. His morality is
the most estimable part of his works; though his conceptions of
moral truths were much less just than those of Anaxagoras and
Plato:[5] for his physics are replete with notions and terms alike
vague, unmeaning and obscure.[6] The intimate connexion that
subsists between the physical and moral fitness of things, in relation
to their respective objects, was more evidently known to Anaxagoras
and Plato, than to either Socrates or Aristotle: and the reason is
obvious;—both of the former cultivated the sublime science of
Astronomy.

To this cause, then, may be fairly attributed the half-enlightened

notions of the Deity,[7] and of a future state, entertained by these
pagan searchers after truth. To the same cause may be traced the
sentiment that dictated the reply made by Anaxagoras,—when, in
consequence of his incessant contemplation of the stars, he was
asked, “if he had no concern for his country?”—“I incessantly regard
my country,” said he, pointing to Heaven.

Plato’s attention to the same celestial science unquestionably

enlarged his notions of the Deity, and enabled him to think the more
justly of the moral attributes of human nature. According to Plato—
whose morality, on the whole, corresponds with the system
maintained by Socrates,[8]—the human soul is a ray from the Divinity.
He believed, that this minute portion of infinite Wisdom, Goodness
and Power, was omniscient, while united with the Parent stock from
which it emanated; but, when combined with the body, that it
contracted ignorance and impurity from that union. He did not, like
his master Socrates, neglect natural philosophy; but investigated
many principles which relate to that branch of knowledge:—and,
according to this philosopher, all things consisted of two principles,—
God and matter.

It is evident that Plato believed in the immortality of the soul of

man; but he had, at the same time, very inadequate conceptions of
the mode or state of its existence, when separated from the body. It
seems to have been reserved for the Christian dispensation, to
elucidate this great arcanum, hidden from the most sagacious of the
heathen philosophers.[9] It was the difficulty that arose on this
subject, the incapability of knowing how to dispose of the soul, or
intellectual principle in the constitution of our species, after its
disentanglement from the body; a difficulty by which all the
philosophers, antecedent to the promulgation of Christianity, were
subjected to unsurmountable perplexities;—it was this, that rendered
even the expansive genius of Anaxagoras utterly incompetent to