Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-03-28
FROM
CAPITAL ASSET
SALES INCOME
Taxes Must Be Paid on Funds
So Derived, U. S. High
Court Rules.
INVOLVES MANY CASES

WASHINGTON, March 28.-The
income tax law of 1918 is con-
stitutional insofar as it provides that
a profit derived from the sale of cap
ital assets is income and taxable, ac-
cording to decision handed down
today by the United States Supreme
Court.
The test case was taken by the Mer-
chants Loan and Trust Company of
Chicago, trustee of the estate of Ar
thur RyersOn. The amount involved in
this suit was 1911, 242. A number CT
other cases of Importance testing ne
validity of the law were taken 20 the
Supreme Court of the United States st
the same time.
A similar decision was rendered in the
case of the Ell Dorado Coal and Min
ing Company of illinois,
Involved in these cases is one of Da-
vid NJ Goodrich Of New York, WING
claimed he was being taxed on loss IN
value of stock securities. Goodrich De-
came owner by gift of stock in the B.
F. Goodrich Company of Akron, Ohio,
prior to March 1, 1913, and sold them
after that date. When he received the
stock it was worth 1921 600. on Mar.h
1, 1913 1t was worth $14S,0O0. When
sold it brought S639, 346. He was taxed
on the difference in value between the
March 1, 1913, quotation and he sales
price.
HOLDS NO TAX CAN
BE LAID ON LOSS.
In the Goodrich case the Supreme
Court held that no tax could be laid on
a loss. The lower court was reversed In
part and the case was remanded for a
further hearing.
In the case of Fred T. Brewster in the
Connecticut Federal Court. a tax leyiei
on profits derived from sale of Interna-
tional Marine bonds, the Supreme Court
of the United States held that the tax
was valid when collected on profits under
the 1916 law. This decision was rendered
by Justice Clarke.
The court affirmed the decision of the
lower Federal courts awarding Judg-
ment in favor of the Coronado Beach
Company of California for S500O,O00 and
interest for seizure by the government of
property belonging to the company.
In 1917, the government seized for avia-
ton uses North Island, in San Diego
harbor. The government claimed this
right of seizure, for national defense was
reserved IL the patent to the island given
the company. The court held the COM
pany had full title to the property
WYOMING WINS
TITLE TO LANDS.
The State Of Wyoming won it's claim
to the title Of lands under a school grant
from the Government. The decision Of
the lower court was reversed.
The court decided in the appeal Of
Henry Friedman versus the United
States that the Government can charge
a maximum price for coal or other min
eral lands in making sales, and sus-
tanned the decision of the Court of
Claims against claim by Friedman for
refund of money paid in a purchase OF
Utah coal lands.
The right of the Government to inn
pose maximum and minimum rates for
the sale of coal lands on the public do
main was challenged by Friedman in his
appeal.
The Government moved in the Supreme
Court for dismissal Of suits brought
under the Lever act against the Ameri-
can Wooden Company, the Brooklyn Ed
Feed Company, Schen, Stevenson & Co,
The Lever act was declared unconstitu-
Court.
The court refused to review and by so
doing, permits to stand as final decisions
in the following cases:
Convictions Of John Gilmore, Texas,
for violating the antinareotic act; viola
Continued on Page Nine.)