New Britain herald., 1921-05-16
Seven Year Ratification
 Proviso Does Not Affect Legality. of Volstead Act As Argued
Increased Value of Any Cap 1Ital Asset Must Be Con- sidered in Corporations
 Profits in Computing
 Taxes.

Taxes.
 Washington. May i6.--The require hent that the prohibition amendment ratified within seven years by three burths of the states does not in- rlidate tho entire measure, the sn- 'eme court ruled today.
 The decision was given in the ap- nal of J. ]. Dillon of San Francisco. "om decisions in lower courts re- isins his rcti icn for n writ Of habeas ,rpus on tho ground that the limitn- on make tho amendment Invalid.
 Increascd Valuc Taxable
 Tho government won today in tho prcmc court its contention that in. toasod value of any capital asset ust hc considered fin a corporations 'ofits when taxes were computed. Tho courts decision was given In o appeal of Ia Belle Iron Works - a ruling of the treasury that
 nnds purchased for st90.0o0 in POF must he rctarrcd in the 1917 re prt at sf0,000.0 900 and a profits tax i'd on tho difference. The opinion bday sustained ths ruling.
 Meaning is Clear
 "The meaning of tho act aa to in- hstod capital Is clcnr'' the court said. was to cover actual cost of propcr-
 disregn rdinE anything that does pt change the form of the invest Sent"
 Hundreds of millions Of dollars in- sss taxes were involved tn the case hich WIS rharactcrlzcd by a high Dygrnment ofilclay ns ''tho most i'm ortant lernl suit affecting federal hnnces ta arlre in several decades" The court was unanimous in it's ccision except tha Justice McRey- bids coneurred only in the result. As bciate Justice Pitney read the binlon.
 Estate Tux Decision. Estate tuxen paid under atate laws bnnot he deducted from tho met cs- te" upon which a tax is affixed un- rs tho federal revenue net of 1916. De supreme court ruled today in af- I'minr dccrees of federal courts in ew York In a suit brought by the kecuturs of the estate of tho late J. n.Nen Purdy.
 Georgia Case Reversed. IWIdrrnl reserve banks have not the ght to insist on par collection of hecks of member hanks. the supreme burt ruled today in effect.
 The court reversed decrces ot corgin courts which had refused to njoin tho federal reserve bank of tlanta from taking steps to force bilection of checks drawn on a num- rr of Georgia state non-member nnks except through the usual and 'dinary channels"
 History of Case.
 Authority Of the Federal Reserve hnk Of Atlanta, Ga. to insist upon hr collection of checks drawn upon on member banks was at issue in he suit brought by more than 70 state inka of Georgia in conjunction with hs American Bank and Trust CO.
 Atlanta. Tho plaintiffs insisted hrouEhout the case, however. that ehlnd this issue wns an attempt or he Federal Reserve institution to pmpel them to join the reserve sys- i'm.
 An injunction was sought to restrain be Atlanta reserve bank from col
 g non-member checks in any
 Rer except through the usual hd ordinary channels through cor bspondcnt banks and clearing buses" It was denied and the case rouEht a appeal tn the supremo burt.
 Counsel charged that a carefully tanned campaign had been decided bon by the Atlanta Reserve bank and hat the very existence of the state anks were threatened. Checks drawn Xgalnst them werc to be held until a krgc amount had accumulated. it was |sscrted. and then a sudden demand hade for the entire amount lover tho ounter." or such checks in large mounts were to be sent through tho bcai postmaster for collection with ut notice. all for the one purpose of m ba rrassing tho hold -outs' from he reserve system.
 The Atlanta Reserve bank denied hat IL intended any Illegal act. The Federal Reserve act prohibited tho ayment of any collection charges, nverrsd. and left it with no alter ative except to proceed Tn tho man cr complained of by the non-mem- CT banks. A further defense was of- ercd In tho fact that universal par ollection of checks would result in hl-annual saving of moro than s70.- 100 to the public.
 The case constituted the first con hrted attack upon the reserve act and as argued in April. 1921.
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