New-York tribune., 1902-01-08
EFFECT OF DOWS DECISION
1T Is BELIEVED TO SETTLE THE INHER-
ITANCE CASES OF CORNELIUS VAN
DERBILT AND OTHERS.

BY the decision Of the United States Supreme
Court in Washington on Monday, declaring the
Inheritance Tax law of New-York to be consti-
tutional and affirming the decisions of the lower
courts in the of Alexander E. Orr and
others, executors of the estate of David Dows,
against the Controller of the State of New-York.
the estate of David Dows will be required to
pay an inheritance tax Of about $4,000. with in
terest at the rate of 10 per cent dating from
January 13, 1899 The Surrogate has power,
upon application, to reduce this rate of interest
TO per cent and it is thought that this VIII
probably be done. 1t is declared. also. that this
decision practically settles the Cornelius VAN
derbilt inheritance case in which the inheritance
tax amounts TO S64. .2O9 80, and numerous other
cases pending in the courts
Jabish Holmes, who argued the Dows case for
the Controller in the Appellate Division, the
Court of Appeals. and finally in the United
States Supreme Court was seen by a Tribune
reporter yesterday. Mr.. Holmes had not yet
seen the opinion of the Supreme Court, and was
not prepared to say exactly what effect 1t would
have on other cases. He said:
The real question at issue was whether property
where the person creating the power died before
there was any transfer tax law There are r greae
given life estate to son or daughter win pOMTfIr ;fI
p Por se @ snch transfers were not taxable and
in that year the legislature passed this power OF
of power Of life tenure as taxable transfer and
imposing a tax that transfer. The opposition
held that was unconstitutional really taxing some
thing that had happened long before
David Dows sr., died in 1880 and by his will he
stores in Brooklyn to his trustees TO hold Tor the
life Of his son. David Dows. 1r- and to pay the
death of David. jr transfer the property 10 such
of David. jr. s children he might designate by
his last will At the time David Dows, ST.. died
there was no tax on properly passing 10 !neal
descendants On the death of David Dows. jr.s
tax had been imposed at the rate OF per cent
Under the power of appointment amendment, which
vided that a taxable transfer should be deemed
accrue when David, IT, exercised the power; David
had been sold. with all Of the real estate by the
executors during his lifetime. and the proceeds in
raised. If there tax whether il
was in when the father died II being real estate,
there could be no tax, since real estate exempt
property. They claimed they had invested consd-
cradle OF the money in securities. which
and must be APPRAISED to determine the le value of
the estate that can be taxed
tically settles the Vanderbilt case In that case
however, Il certain amount OF the money is invested
IN 4 qea Statgs oonqs and they hold that makes
IS that some United States Government bonds are
appraised in the Vanderbilt case. and there We're no
were other things such securities which the court
has held to be taxable think it viii be that
bt case.
William H Vanderbilt by his will created trpst
Of S500o0)0 in favor of his son Cornelius and gave
him power OF appointment. The property was eITe9
10 trustees TO hold in trust and pay the income
10 Cornelius. and on his death pay the principal
MAS a part Of trust of s25Go0,G0o which William
Whole no fb. dIwi0ed am among ms children The
upon the death OF the children. The tax on the
.sI sstste sd Of Cornelius Vanderbilt will amount to