The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1921-03-28
SUPREME COURT MAKES
IMPORTANT JUDGMENT
AFFECTING MANY CASES
Increase in Value Of Cap.
ital Investments Also
Held Liable.

Washington, March sS-The
government won q string Of
victories today In income tax
decisions handed down by the
supreme court Solicitor. Gen.
eral Friers0n declared tho gov.
ernment's position had been mp.
held completely. The effect Of
the rulings, he added, was that
any gain derived from corporate
bond or capital, asset invest.
ments was taxable rs income,
the amount Of income subject
to such taxation still to be estl.
mated from March /, 1913.
Washington, March SS.-
Profits realized from the sale
Of assets Of . trust fund are
taxable under income excess
profits law, the supreme court
held today. The decision Of the
court directly affects several
cases now in litigation and In.
directly affects thousands Of
trust funds. 1t was given in the
appeal brought by the Mer.
chants Loan and Trust com.
pany, as trustees Of the estate
or Arthur Byerson, . citsen Of
Illinois,
Ryerson left as part Of his
estate capital stock IN the firm
of Ryers0n & Son, valued It
S560yO0O. Four years after his
death this stock was sold for
sl,2Sey 900, and tho cash obtain
ed was added to the estate. Tho
government imposed q tax Of
x31l 900 on. the increased value.
The opinion was read by As.
Soeiate Justice Clark.
Increase TAXABLE.
Increase in value Of . capital
is taxable as income
lnder the revenue act Of 1916, the
supreme court today held.
The courts decision was given
n the appeal Of David M. Goodrich.
rom a ruling of the internal reve-
lue bureau assessing him upon the
increased value OF stocks pur-
chased prior to 1918. Action of the
'evenue officials was affirmed by
he supreme court in the transac-
ion showing an actual loss could
lot be taxed since there was no
gain" derived.
In the case OF David NJ Good
'ich VS.. William H. Edwards, col
ector of internal revenue for a
second New York district, tax
vas assessed on stock which was
sold at a loss, but which was sold
It a price above that quoted for 1t
IN March /, 1918, the date set in
he statute as that from which
prices would be computed. New
York courts upheld the government.
The second case came from Con-
lecticut where the federal courts
sustained Frederick F. Brewster in
lis contention that an increase in
he value of an investment was not
income" Brewster made a slight
lctual profit over the price paid Off
lis securities and a heavy profit
when computed from the value on
March /, 1913.
In both cases counsel argued
hat bonds are property without
'eference to cost or market value:
he bonds themselves are their
,wners, capital assets and his CAPT
al interest therein is not limited
o their cost"
Corporate Bonds.
Increase in the value OF corporate
,onds, originally acquired and held
or investment, is taxable under
he revenue act of 1916, the su-
)reme court also ruled today.
The supreme court reversed the
decision of federal courts Of Con-
lecticut, which held against the
on the question OF
whether an income tax could he
evied against an increase In the
value of securities purchased and
1eld as an investment. but ruled
hat the tax could only be imposed
IN the actual gain,
Thousands of cases of income as
come within this decision
If the court, upon which depended
he necessity Of the government re-
millions of dollars in
axes.
Insurance Case.
Washington, March 28.-The su-
preme court agreed today to review
decisions of New York courts
that dividends applied by
credit in partial payment Of stipu-
lated premiums did not constitute
income" and also that decline In
value Of securities owned
by the tax pawer constituted de-
probation OF property" 49,
The decision of the lower court
was rendered in favor Of the New
York Life Insurance company. In
suits filed by that company against
w. Anderson, collector Of
Internal revenue for the second
New York district.
Packers Holdings.
Warrington. March 2s. - An
agreement to take up April II. tes-
timony as to the value of stockyard
Of Armour & Co.. and
Swift & Co., was reached today in
the District Of Columbia supreme
court. The packers have agreei to
divest themselves Of stockyards
ownership. but the method and the
value Of property involved ars In
contsonqxH