The New York herald., 1921-06-07
GOVERNMENT LOSES
ESTATE TAX DECREE
Levy Allowed as Deduction
From Income by the
Supreme Court.
EXPLOSION SUIT UPHELD
Lehigh Valley Road Liable for
Damages From BLACK
Tom Blast.

WAsrIrNGroN, June 6.-The Supreme
close to-day. adjourning until October 3.
Dismissal of the Governments appeal.
on motion of Solicitor General Frierson,
from lower court decrees holding that
the American Can Company did not
constitute monopoly under the Sher-
man antitrust law and decision
against the Government in the estate
tax case marked the final days session.
The Solicitor Generals motion to dis
miss the appeal in the American Can
case, he explained, was made because
of the evident meaning of the courts
decision in similar case against the
United States Steel Corporation when
II held that an unreasonable" restraint
must be proven before the law could
be invoked.
Executors Of the estate of the late
Alan H. Woodward Of Alabama were
upheld In their contention that the es-
tate tax assessed under the act of 1916
was an allowable deduction" In COM
putting the net income Of the estate for
the purpose Of the income tax. de-
cree Of the Court of Claims holding
that the internal revenue authorities
had erred In refusing to allow such de-
duction was affirmed.
The Woodward estate paid a tax OF
$4,000 on transfer and was assessed
t165, 900 as income tax on the amount so
paid out. The income tax law, the
court held, was explicit in allowing de-
ductions Of taxes paid or accrued
within the taxable year imposed by the
authority Of the United States except
income, war profits and excess profits
taxes" Since the estate tax was
Federal tax and was not included In the
exceptions, the court held that 1t was
deductible.
"BIack Tom" Decision stands.
The court refused to review decisions
of New York courts holding the Lehigh
Valley Railroad Company liable for
damages resulting to certain freight
shipments in the BLACK Tom" explosion
on July 1890. 1916.
Suits aggregating $10.000.000 have
been filed or are pending as result OF
the disaster. The appeal brought by the
Lehigh Valley was from decision IN
favor of John Lysaght, Ltd. a British
corporation. and was considered some-
what N the light of a test case.
The court also refused to review de-
cisions of New York courts holding that
it's method Of applying the corporation
franchise tax imposed under section ga
Of the New York statutes The lower
courts determined that "stocks must be
included as assets to their full value
and that the interest on bonds should be
excluded or subtracted from income" In
computing the tax due, but upheld the
validity Of the statute as a whole.
Contentious Of the Western Union
l..A ,%k hA
held liable for damages caused through
errors in transmitting messages while
it's lines were under Government control
were upheld by the Supreme Court. A
decision Of South Carolina courts,
awarding damages to S. B. Poston,
cotton dealer, on this ground, was re-
versed.
The court refused to permit the I'LL
ing OF a petition for proceedings to
restrain Judge Knox in New YORK from
hearing a libel suit against the Turkish
Government steamship Gui DJemal
The status under American law Of
vessel owned by a foreign government
but used In purely commercial activity
has never been decided the court said
and the case should be allowed to go
forward. Associate Justice Mckenua.
announcing the ruling. referred to the
fact that the Ottoman Government LAS
no diplomatic relations with the United
States and was only recently aligned
with enemies of this country.
GasoIene Sales Tax Upheld.
The State Of New Mexico won a par
tial victory in its fight to sustain the
special tax on gasolene sales within its
borders. The court reversed decree OF
the United States District Court of New
Mexico In favor of the Continental Oil
Company, holding that the tax was un-
constitutional on the ground that It was
an interference with interstate COM
merce.
"The decision under review should be
reversed" the decision said. land the
cause remanded with directions to grant
a decree enjoining the enforcement as
against the Continental Oil Company of
the license tax without qualiflca ton.
and of the excise tax upon the sale
and use of gasolene only with respect to
sales of gas brought from without the
State into New Mexico and there sold
and delivered to customers In the orig
inal packages"
Right of the State to collect on
broken package" sales was upheld as
was the tax upon "any and all gasolene
used by the oil company at It's distribut-
ing stations or elsewhere"
Most OF the cases of general interest
remaining undecided were ordered re
stored to the docket for reargument be-
fore a full bench" These include the
Wyoming Colorado suit over control Of
waters Of the Colorado River. the United
shoe Machinery Company case involving
alleged violation of the Clayton act In
iease-spntracts and the child labor case
involving the validity Of special taxes
upon products Of the labor Of minors
Cases not to be reargued include that
OF the Coronado Coal Company against
the United Mine Workers of America to
determine liability of national labor or
ganization for damages resulting from a
strike and the suit brought by the Gov
ernment to restrain the American Hard
wood Manufacturers' Association from
continuing the "open competition" prac-
tce OF swapping price and sale data
among its members.