Martinsburg herald. [volume] (Martinsburg, W. Va.) 1881-1920, 1898-10-08
DECIDED AGAINST GOULD
The Millionaire Mast Pay Tax on
a$5,000,000 Request.
HOW THE PAYMENT WAS EvADED

This Princely sum Was Left by Jay
Gould to His son For ''Se vices Rem
dered" For Twelve Years succeed
ing the Latter's sixteenth Birthday.
Albany. n. Y, oct. 5.-George ].
Gould. by a decision OF the court OF
appeals. viii be compelled to pay to the
state $1S2.7S4 as tax on a $4,000 be-
quest left him by his father, the late
Jay Gould The decision also declares
that the estate of Jay Gould was not
appraised $40 900 in excess of its
actual value. as was contended by the
executors Of the dead railroad king.
The case has been at issue for the
last -four years. and in it's disposition
precedent is established which in the
future will have great weight in the
determination of cases arising under
the administration of the taxable trans
fer act.
When Jay Gould died and his will
was offered for probate the surrogate
of New York county appointed David
Mcclure OF New York, as appraiser
for the purpose of collecting a tax I'M
der the collateral inheritance statute
of the state. He fixed the taxable
value of the estate at $fs615, 4S7 and
decided that 100000 left to George J.
Gould did not come within the opera
ton of the act, 1t being alleged that
the sum in question was left by the
father to the son in payment for
debt for services rendered during a
period OF II years.
Two appeals were taken from that
decision. The executors appealed from
the appraised valuation OF the taxable
property. claiming that there was an
generalization OF $40. 100000 and the
comptroller of the state appealed from
the exemption of the $4,000 900 from
taxation contendinG that debt, II
one really existed, paid in that manner
did not exempt the amount paid from
the operations OF the taxable transfer
act The surrogate sustained the APP
praiser in both OF his conclusions. The
case was appealed to the appellate di-
vision of the supreme court. and that
tribunal rendered decision affirming
that of the surrogate. The case was
carried on appeal 10 the court of APP
peals and argued before that court
at Saratoga in June last by John +.
Dillon for the Goulds and David Il.
Hill on behalf of the comptroller.
In relation to the alleged overyalua-
ton of the estate It was contended that
the appraisers had employed an err
roneous method in determining the
market value Of shares of stock owned
by the estate He had appraised them
at their market value at the time of
the appraisal which the Gould ex-
.outors declared would have depreciat-
ed to a great extent IL an attempt had
been made to sell them in the open
market at that time The state APP
pealed from the exemption OF the 3d.
600 900 from taxation on several
grounds. The first was that the al
legged obligation of the father to the son
was preposterous. 1t represented an an
nual salary of nearly 100000, dating
from the time George Gould was l6
years of age, which was larger by many
figures than that received by the high
est salaried man in the United States.
1t was also contended that II was a
subterfuge to defeat the operations OF
the taxable transfer act and that II
permitted to stand as legal would be a
precedent that many others might fol-
low in order to escape paying the tax
imposed. The legal proposition adj
vanced by the state was that the pay
ment of debt by bequest succeeding
death does not exempt the property
given as compensation from taxation
under the taxable transfer act.
The state wins on both propositions.
The appraised valuation of taxable
property of the estate stands, and
tax must be paid on the $5.O00000.