New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-05-05
COURT RULING TO AID
MORGAN APPRAISAL
Value of Good Will Determined
by Book Value, Said Court of
Appeals in ReeS Case.
PERSONALITY A FACTOR
Estate of Isidor Straus Affected,
and Counsel for the State Con-
troller Looks for Increase
in Executors Valuation.

Thomas +. Rush attorney for the State
Controller, expressed the opinion yester-
day that recent decision by the Court
of Appeals would facilitate the work OF
appraising the estate of j. Pierpont Nor
gan. This decision was handed down in
the matter of the appraisal of the estate
of Norman l. Rees and cleared up per-
picking point as 10 the method by which
the value of the good will of business
might be reached.
The Court of Appeals sustained the con-
tention Of the State Controller that the
value of the good will of a company is to
he determined by the book value of such
company and not by the market value Of
some Of the shares of stock OF the com
pany. The court upholds the theory that
an important factor is the loss of the
personality of the man whose estate is
to be appraised and also that the value Of
the good will must be fixed according to
the profits of the business.
Mr. Rush said: This matter is of the
utmost Importance because up to this time
in the case Of the estate Of every man OF
large business affairs we have always
been confronted with a dispute as to the
proper basis upon which the valuation of
the business and the good will should be
computed
Mr. Rush believed that the most difficult
question TO be determined in the appraisal
of the estate of Mr. Morgan involved the
good will of J. =. Morgan & Co.. While
the decision Of the Court of Appeals in
the Rees case makes it necessary TO reach
a value by the profits as shown by the
book value, at the same time, in effect. 1t
provides that an amount commensurate
with the estimated value of the impor-
tance Of Mr.. Morgan's personality in his
banking firm must be deducted from the
estimated book value.
Mr. Rees was president OF Hans Rees's
Sons. Inc hide and leather merchants
Tile left an estate valued at S964.555. His
largest holding was 1898 shares of his
company's stock. The executors under
Mr.. Recess will contended that the stock
was worth not more than so a share
one expert placed value Of only $8 on
a share. while another said SO to $40
would be a high valuation. An expert
for the state Controller who examined
the books of the company said he thought
the stock should be taxed at $40 share.
He later reduced his valuation to $50. The
transfer tax appraiser taxed the interest
of Mr. Rees in his company at Sl0s,Soo.
The admitted market value was S621.3lO.
The appraiser deducted s. on each share
on account of the loss of Mr. Reess per-
sonality in the business.
The decision of the highest court of the
state will have an effect on the appraisal
of the estate of Isidor Straus, who was
member of X. II. Macy q Co. The larger
norton of his estate. 1t is understood,
was represented by his interest in this
concern The proceedings for the ap-
praisal Of the estate of Mr. Straus nave
been delayed by the question OF the Value
of the good will of the business. with the
decision Of the Court of Appeals favorlng
his contention, Mr.. Rush thinks that the
appraisal of the interest Of Mr.. sraus IN
r. II. Macy & Co. will be larger than the
valuation placed on il by the executors