Court Opinion

ID: 4588859
Source: CourtListenerOpinion
Date Created: 2020-11-20 18:42:58.855189+00
Date Added: 2024-06-11T07:50:09.352804
License: Public Domain

ST. LOUIS BRIDGE CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.  TUNNEL RAILROAD OF ST. LOUIS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.St. Louis Bridge Co. v. CommissionerDocket Nos. 18766, 18767, 28662, 28663.United States Board of Tax Appeals17 B.T.A. 185; 1929 BTA LEXIS 2335; September 10, 1929, Promulgated *2335  Petitioners held not to be affiliated with Terminal Railroad of St. Louis under the provisions of section 240 of the Revenue Acts of 1918 and 1921.  T. M. Pierce, Esq., Nelson Trotman, Esq., Fred Esch, Esq., and S. M. Wallace, Esq., for the petitioners.  J. A. Adams, Esq., Frank A. Surine, Esq., and J. T. Haslem, Esq., for the respondent.  PHILLIPS *185  The deficiencies determined by the Commissioner and in issue in these proceedings, which have been consolidated for hearing and determination, are as follows: Docket No.PetitionerYearDeficiency18767St. Louis Bridge Co1921$26,334.0028663 do192233,665.631920730.0018766Tunnel Railroad of St. Louis19218,250.0028662 do192210,546.88In the notice of deficiency for the year 1921 to the St. Louis Bridge Co., the Commissioner determined that there was an overassessment of tax against that company for 1920.  In Docket No. 18767 error is alleged with respect to the determination for such year.  Both parties have stipulated that the Board has no jurisdiction over that year and that such proceeding, so far as it relates to the*2336  year 1920, be dismissed.  *186  It is alleged in each of these proceedings that the Commissioner erred in his determination that petitioners were not affiliated with the Terminal Railroad of St. Louis and in computing the tax liability of these petitioners on the basis of their separate income and not on the basis of a consolidated return for these petitioners and such terminal company.  At the hearing it was ordered that if said companies be held to be affiliated, a further hearing be had for the purpose of determining the tax liability of these petitioners under section 240 of the Revenue Act of 1921.  The facts were stipulated by the parties.  FINDINGS OF FACT.  The St. Louis Bridge Co. and the Tunnel Railroad of St. Louis are Missouri corporations, both incorporated on December 18, 1878, for a period of 500 years.  The St. Louis Bridge Co. and the Tunnel Railroad of St. Louis were organized for the purpose of owning and operating the Eads Bridge across the Mississippi River at St. Louis and the tunnel approach thereto in St. Louis.  These companies, the petitioners, by an agreement dated July 1, 1881, leased all their properties to the Wabash, St. Louis & Pacific*2337  Railway Co. and the Missouri Pacific Railway Co. for the entire term of corporate existence of the petitioners and any renewals or extensions thereof.  Said lease provided as follows: This indenture, Made this 1st day of July, one thousand eight hundred and eighty-one, by and between the St. Louis Bridge Company and the Tunnel Railroad of St. Louis, both corporations, created, organized and existing under and by virtue of the laws of the State of Missouri and hereinafter called the lessor companies, parties of the first part, and the Wabash, St. Louis and Pacific Railway Company and the MissouriPacific Railway Company, corporations created and existing under and by virtue of the laws of the states of Ohio, Indiana, Illinois and Missouri, hereinafter called the lessee companies, parties of the second part, witnesseth: First.  That the said lessor companies have demised and let, and by these presents do demise and let unto the said lessee companies, all the right, title, interest, property, possession, claim, and demand of them, the said lessor companies, and of each of them, of, in and to the bridge over the Mississippi River and the approaches thereto, in the cities of St. Louis, *2338 Missouri, and East St. Louis, Illinois, and the tunnel and railroad tracks in the said cities and the lands, tenements, hereditaments, and appurtenances, buildings, fixtures, machinery, furniture, and equipments thereunto belonging, or in anywise appertaining, now owned and used by said lessor companies in their proper business, for and during the term of the corporate existences of said lessor companies, and of each of them, and of any and all renewals and extensions of such corporate existences, commencing the first day of July, one thousand eight hundred and eighty-one, and also have assigned and transferred, and hereby do assign and transfer to said lessee companies, all and singular, the rights, interests, terms of years, and estates of said lessee companies, or either of them, given or secured by virtue of the lease and agreement, dated 1st February, *187  1879, made by and between the Union Railway and Transit Company of St. Louis (of Missouri), and the Union Railway and Transit Company (of Illinois), and the said lessor companies, and the lease and agreement dated March 3rd, 1880, made by and between the Terminal Railroad of St. Louis and the Terminal Railroad of East*2339  St. Louis, and the said lessee companies, and all other leases, contracts, or agreements, entered into or held by said lessor companies, or either of them, for the use and enjoyment of any property, real or personal, in connection with or appurtenant to said bridge and its approaches and said tunnel and railroad tracks, or any part thereof, all of which said leases, contracts, and agreements, the said lessee companies hereby assume and hereby, jointly and severally covenant, promise and agree to and with the said lessor companies, that they will at all times hereafter, do, keep, and perform all acts, matters, and things in and by such leases, contracts, and agreements required to be done, kept, or performed by said lessor companies or either of them.  Second.  The said lessee companies, jointly and severally, covenant and agree to and with said lessor companies, to pay as and for the rental of the premises hereby demised: 1.  The interest and principal, as the same shall respectively fall due of the bonds of said St. Louis Bridge Company, of the series amounting to $5,000,000, secured by its mortgage to J. C. Rogers and C. E. Tracy, dated 1st April, 1879, and to pay said interest*2340  at the rate and at the time and places therein specified.  2.  To the holders of the $2,490,000 first preferred capital stock of the said St. Louis Bridge Company, dividends at the rate of five dollars a share in each year for the three years ending 1st January, 1885, and thereafter at the rate of six dollars a share in each year, the first half-yearly installment to be paid the 1st day of July, 1882.  To the holders of the $3,000,000 second preferred capital stock of said St. Louis Bridge Company, dividends at the rate of three dollars a share in each year, the first half-yearly installment to be paid on the 1st day of July, 1884.  To the holders of the $1,250,000 capital stock of said Tunnel Railroad of St. Louis, dividends at the rate of six dollars a share in each year, the first half-yearly installment to be paid on the 1st day of January, 1882.  All of such dividends to be paid in gold coin of the United States of America of the present standard weight and fineness, and half-yearly, on the 1st days of January and July in each year, in the city of New York, free and clear of all taxes or other charges.  The moneys for the payment of interest and principal of said bonds and said*2341  dividends, in each instance, shall be deposited by said lessee companies with Messrs. Drexel, Morgan & Co., of the city of New York, bankers, or their satisfactory successors, at least fifteen days before the same shall become due.  3.  All taxes assessments and other like charges laid or imposed upon the corporate property and franchises of said lessor companies, and of each of them, and upon the premises hereby demised, or any part thereof, or upon the revenues or earnings of the same during the term hereby created.  4.  And also to said lessor companies the sum of twenty-five hundred dollars in each year of the term hereby created, together with such further sum as may be required for expenses of advertisement, publication of notices, making reports to the government, and other like matters required by law of said lessor companies or either of them.  Third.  That the said lessee companies covenant and agree to and with said lessor companies, that they will at all times hereafter provide for the use of said lessor companies at the city of St. Louis, in the state of Missouri, a proper *188  and sufficient place for the principal office of said lessor companies, where meetings*2342  of their directors and stockholders may be held, their business transacted, and their records, books, and documents safely kept, and also that the said lessee companies will pay the proper and necessary expenses of the fiscal agency of said lessor companies, as heretofore established, and also of maintaining a proper and suitable agency at the city of New York, at all times, hereafter, for the transfer of shares of stock of said lessor companies, and also that they will by proper writings authorize, constitute, and appoint suitable agents at the said city of New York, to indorse upon the certificates of stock of said lessor companies, at the request of the holders thereof, and in their names and on their behalf, to execute a memorandum of the guarantee of dividends hereinbefore mentioned, substantially as follows: In the case of first preferred stock of said St. Louis Bridge Company: For value received, the Wabash, St. Louis and Pacific Railway Company, and the MissouriPacific Railway Company, jointly and severally guarantee to the holder hereof, the payment of dividends upon the stock represented by this certificate at the rate of five dollars a share in each year for the three*2343  years ending 1st January, 1885, and thereafter at the rate of six dollars a share.  The first half-yearly installment to be paid 1st July, 1882.  Such dividends to be paid half-yearly in the city of New York, on the first days of January and July in each year, in gold coin of the United States of America.  THE WABASH, ST. LOUIS AND PACIFIC RAILWAY COMPANY, AND THE MISSOURIPACIFIC RAILWAY COMPANY, BY THEIR AGENTS.  And in the case of the second preferred stock of said St. Louis Bridge Company: For value received, the Wabash, St. Louis and Pacific Railway Company and the MissouriPacific Railway Company, jointly and severally, guarantee to the holder hereof, the payment of the dividends upon the stock represented by this certificate, at the rate of three dollars a share in each year.  The first half-yearly installment to be paid 1st July, 1884.  Such dividends to be paid half-yearly in the city of New York, on the first days of January and July in each year, in gold coin of the United States of America.  THE WABASH, ST. LOUIS AND PACIFIC RAILWAY COMPANY, AND THE MISSOURIPACIFIC RAILWAY COMPANY, BY THEIR AGENTS.  And in the case of the stock of the Tunnel Railroad*2344  of St. Louis: For value received, the Wabash, St. Louis and Pacific Railway Company, and the MissouriPacific Railway Company, jointly and severally, guarantee to the holder of hereof, the payment of dividends upon the stock represented by this certificate, at the rate of six dollars a share in each year.  The first half-yearly installment to be paid 1st January, 1882.  Such dividends to be paid half-yearly in the city of New York on the first days of January and July in each year, in gold coin of the United States of America.  THE WABASH, ST. LOUIS AND PACIFIC RAILWAY COMPANY, AND THE MISSOURIPACIFIC RAILWAY COMPANY, BY THEIR AGENTS.  Fourth.  That the said lessee companies shall and will maintain and keep the premises hereby demised and every part thereof in good condition, and at their own expense make all necessary repairs and renewals of the same, and operate and use the same for the purposes for which the said lessor companies hold the same, and shall and will indemnify and save harmless the said lessor *189  companies of and from any and all claims from damages arising out of such operation or use, and shall and will take over all the assets and all the liabilities*2345  of said lessor companies and each of them, as the same shall exist on the said first day of July, 1881.  Fifth.  That in case of default by said lessee companies in any of the matters or things herein contained or provided for, and the continuance of such default for sixty days, the said lessor companies shall have the right to enter upon all and singular the premises hereby demised and the same to repossess and enjoy in the same manner as if these present had not been made.  Sixth.  That the said lessor companies shall and will apply to said yearly sum of twenty-five hundred dollars to the payment of salaries of their necessary officers, and shall and will do all and singular such acts and things as may be necessary or required by law to maintain and renew or extend their respective corporate existences, the necessary expenses thereof being paid by said lessee companies.  Seventh.  That the said St. Louis Bridge Company shall and will procure all its $2,500,000 of common stock to be transferred to the Mercantile Trust Company of the city of New York, to be held by it in trust, with power and authority, so long as the said lessee companies shall perform their obligations under*2346  this lease, to vote in person or by proxy upon said stock at any and all meetings, special or stated, of the stockholders of said St. Louis Bridge Company, and upon any proposition submitted at such meeting, as shall be directed by the said lessee companies, not inconsistent with the preservation of this lease.  The said common stock, subject to the above restriction as to the custody and control thereof, shall go and belong to the said lessee companies.  All expenses of the trust hereinabove provided for shall be borne by said lessee companies.  In 1889 the lease referred to above was assigned to the Terminal Railroad Association of St. Louis, a Missouri corporation.  The Terminal Railroad Association of St. Louis operates the terminal and transfer facilities as a unit.  The properties leased from the petitioners are an integral part of such terminal facilities and could not practically be operated separately.  The terms of the original lease were modified at the time of its assignment to the Terminal Railroad Association of St. Louis.  The instrument assigning said lease and modifying its terms reads as follows: This indenture, made this third day of October in the year eighteen*2347  hundred and eighty-nine, between the Terminal Railroad Association of St. Louis, as first party; the St. Louis Bridge Company and the Tunnel Railroad of St. Louis, jointly, as second party; and the MissouriPacific Railway Company, and the Wabash Railroad Company; successor in interest of the Wabash, St. Louis and Pacific Railway Company, in the lease of the bridge and tunnel properties bearing date of July 1, 1881, as third party; bears witness: Whereas, By a certain indenture, between the parties hereto, bearing date October 1, 1889, it was agreed that the lease of the bridge and tunnel properties to the Missouri Pacific and Wabash Railway Companies, bearing date July 1, 1881, should be assigned and transferred to the Terminal Railroad Association of St. Louis, party of the first part, in pursuance of the plan of reorganization of terminal facilities agreed upon by the parties hereto and the various railroad *190  companies owning or operating railroads entering St. Louis and East St. Louis, referred to in said above mentioned indenture.  Now, therefore, it is agreed between the parties hereto as follows: First.  In consideration of the premises and of one dollar to them*2348  in hand paid, the receipt whereof is hereby acknowledged, the said parties of the third part have assigned and transferred, and do hereby assign and transfer to the party of the first part, the said Terminal Railroad Association of St. Louis, all and singular, the rights, interests, terms of years, and estates of said parties of the third part and of either of them, given or secured under a certain indenture of lease bearing date July 1, 1881, between the St. Louis Bridge Company and the Tunnel Railroad of St. Louis, lessors, and the Wabash, St. Louis and Pacific Railway Company and the MissouriPacific Railway Company, lessees, and recorded in the office of the recorder of deeds of the city, of St. Louis in book 670 at page 84.  From this assignment and transfer of said above mentioned lease bearing date July 1, 1881, is excepted, however, any interest in the leases of the Union Railway and Transit properties and the Terminal Railroad properties, bearing date respectively January 1, 1879, and March 3, 1880, to the said bridge and tunnel companies, said two last named leases having been cancelled and surrendered in compliance with the provisions of said indenture bearing date October 1, 1889, hereinbefore*2349  referred to.  Second.  In consideration of the premises, the Terminal Railroad Association of St. Louis, said party of the first part, hereby assumes for itself, its successors and assigns, all the obligations imposed upon the original lessees in said indenture of lease bearing date July 1, 1881, and agrees for itself, its successors and assigns, that it and they shall and will punctually and fully perform and pay, without diminution or charge, each and every the covenants and payments stipulated in said lease to be performed and paid by the lessees therein named, and in all respects to be bound by and perform the conditions of said lease as if the first party hereto had been originally named as lessee in said lease; also that the several payments of principal and interest on bonds and of dividends on stock which are payable as rental under said lease shall become, and the same are hereby declared to be a first charge and lien upon all the income of the first party hereto, and the payment of said rental to said bridge and tunnel companies shall have precedence over any and all other payments, rentals or otherwise, except interest on the 4 1/2 per cent bonds, referred to in said indenture, *2350  bearing date October 1, 1889.  Third.  The said Terminal Railroad Association of St. Louis, said first party, further agrees that when the certificates for the first and second preferred stock of the St. Louis Bridge Company, and for the stock of the Tunnel Railroad of St. Louis are surrendered for transfer into new certificates, it will endorse thereon a guarantee of dividends, substantially as follows: In the case of the first preferred stock of said St. Louis Bridge Company: For value received, the Terminal Railroad Association of St. Louis guarantees to the holder hereof the payment of dividends upon the stock represented by this certificate at the rate of six dollars a share in each year.  Such dividends to be paid half-yearly in the city of New York, on the first days of January and July in each year, in gold coin of the United States of America.  TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, By Agent.And in the case of the second preferred stock of said St. Louis Bridge Company: *191  For value received, the Terminal Railroad Association of St. Louis guarantees to the holder hereof the payment of dividends upon the stock represented by this certificate, *2351  at the rate of three dollars a share in each year.  Such dividends to be paid half-yearly in the city of New York, on the first days of January and July in each year, in gold coin of the United States of America.  TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, By Agent.And in the case of the stock of the Tunnel Railroad of St. Louis:  For value received, the Terminal Railroad Association of St. Louis guarantees to the holder hereof the payment of dividends upon the stock represented by this certificate, at the rate of six dollars a share in each year.  Such dividends to be paid half-yearly in the city of New York, on the first days of January and July in each year, in gold coin of the United States of America.  TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, By Agent.And the said party of the first part covenants, promises and agrees to and with the several persons and parties who shall receive and at any time hereafter hold such new certificates bearing its guaranty, that at no time hereafter shall any alteration or modification be made of the terms of said agreement between it and said railroad companies, whereby the payment to be made by said railroad companies*2352  for the use and enjoyment by them of its property shall be reduced or diminished below what shall be necessary for the prompt payment of said dividends so guaranteed by it; and that upon default in payment of any of said dividends, said persons and parties being holders of certificates bearing said guaranty of said party of the first part, shall at once be and become entitled to enforce either in its or their own names and by appropriate proceedings at law or in equity or otherwise, any and all liability of said railroad companies, or of either of them, to said party of the first part under said agreement, and all amounts at the time payable under said agreement or thereafter becoming due under its terms to said party of the first part shall be and become appropriated for the satisfaction of any such dividends remaining unpaid.  And the said parties of the second part, in consideration of the premises and of the assumption by the party of the first part hereto of all the covenants and liabilities of the MissouriPacific Railway Company and of the Wabash, St. Louis and Pacific Railway Company, and its successor in interest, as aforesaid, in and under said lease bearing date July 1, 1881, do*2353  hereby consent to the assignment and transfer to said party of the first part of the said lease of the properties of said parties of the second part, bearing date July 1, 1881, and so far as they lawfully can do hereby release said parties of the third part from all future, personal, or individual liability as such lessees on any and all covenants therein contained.  Fourth.  The party of the first part also further agrees that in case it, its successors or assigns shall ever become and be in default for a period of sixty days in the payment of interest upon any of the outstanding bonds of said $7,000,000 issue (or any bonds issued in renewal or substitution thereof), referred to in said indenture bearing date October 1, 1889, so that there may be danger of foreclosure of mortgage and sale of said terminal properties, said first party shall and will on demand execute and deliver to the second party a perpetual lease, and will thereupon on demand surrender to the second party immediate possess on of all the properties of the first party which may be embraced in said mortgage or deed of trust, in consideration that the said second party shall and will pay the interest accrued or to*2354  accrue on said 4 1/2 *192  per cent fifty year bonds, or any of them that may be outstanding and shall and will further provide for the payment or extension and final payment of the principal of said bonds when the same shall become due, together with accruing interest on said bonds that may be so extended.  And the St. Louis Bridge Company, one of the parties hereto of the second part, for itself, its successors and assigns agrees that whenever the first mortgage bonds of the St. Louis Bridge Company, of the series amounting to $5,000,000 secured by its mortgage to J. C. Rogers and C. E. Tracy, dated the first day of April, 1879, shall mature or become due and payable, it will for the purpose of providing for the taking up or the payment of the principal of the said bonds, and on the request of the party of the first part hereto, from time to time, make issue and deliver such other mortgages and bonds of the same amount bearing such rate of interest, not exceeding 7 per cent per annum, and payable at such times and secured by the same property as is embraced in the mortgage to secure the bonds so to be taken up or paid, as may be deemed desirable by the party of the first*2355  part; but this provision shall not be construed to release the party of the first part from its obligations to pay or to provide for the payment of the said bonds secured by the said mortgage of April 1, 1879.  Fifth.  The original lessees of the said bridge and tunnel properties under the said indenture of lease bearing date July 1, 1881, having since the day of the date thereof operated and been in possession of said property, managing and controlling the same as a separate and distinct railway property, and while so operating and in the possession of said bridge and tunnel properties, as such lessees, having incurred liabilities in consideration of the premises and the transfer and delivery by said parties of the third part to said party of the first part of all property, claims, and demands of every nature and kind whatsoever acquired by said parties of the third part while the earnings of said leased properties and the revenues arising therefrom, and used in connection with the operation and maintenance of said leased properties, the said first party does hereby assume any and all liability on the part of said parties on the third part, and either of them, arising in any way*2356  out of their operation and possession of said bridge and tunnel properties, as lessees thereof; it being the intention of the parties hereto that by this assignment and transfer of said indenture of lease bearing date July 1, 1881, the said party of the first part shall have all the rights and be subject to all the liabilities that would exist upon its part had it been the original lessee in said lease and in possession and enjoyment of the properties thereby leased from the day of the date thereof.  The officers of the Terminal Railroad Association of St. Louis, namely, the president, the vice president, the secretary-treasurer, and the auditor, hold the same respective positions in the petitioner companies to which they are elected annually by individuals who were officers of the said petitioner companies and who were also officers of the Terminal Railroad Association of St. Louis, said individuals voting at annual elections under authority of proxies given to them by some of the stockholders of the petitioners.  The Terminal Railroad Association of St. Louis has at all times complied with the terms of said lease as modified by the assignment *193  of it.  The Terminal*2357  Railroad Association of St. Louis treats its obligations under said lease as modified by the assignment as an expense of operating its business.  The following statement shows the various classes and amounts of stock of the St. Louis Bridge Co. which were outstanding during the years 1920, 1921, and 1922: First preferred stock, 6 per cent dividend rate$2,490,000Second preferred stock, 3 per cent dividend rate3,000,000Common stock, no dividend rate specified2,500,000Each of said classes of stock, namely, first preferred stock, second preferred stock and common stock, had equal voting rights.  The Tunnel Railroad of St. Louis had outstanding during the years 1920, 1921, and 1922, common stock of a par value of $1,250,000.  The par value of each share of the outstanding stock of the St. Louis Bridge Co. and the Tunnel Railroad of St. Louis was $100.  The Terminal Railroad Association of St. Louis did not own any of the first preferred stock or any of the second preferred stock of the St. Louis Bridge Co. during the years 1920, 1921, and 1922.  The only right or rights which the Terminal Railroad Association of St. Louis had in the common stock of the*2358  St. Louis Bridge Co. was that derived by it under the assignment of the original lease.  All of the first preferred stock and all of the second preferred stock of the St. Louis Bridge Co. which was outstanding during the years 1920, 1921, and 1922 was owned and held by the public in general.  All of the stock of the Tunnel Railroad of St. Louis which was outstanding during the years 1920, 1921, and 1922 was owned and held by the public in general.  The Terminal Railroad Association of St. Louis did not own any of the capital stock of the Tunnel Railroad of St. Louis during the years 1920, 1921, and 1922.  Neither the St. Louis Bridge Co. nor the Tunnel Railroad of St. Louis owned any of the stock of the Terminal Railroad Association of St. Louis during any of the years 1920, 1921, and 1922.  The following statement shows the number of shares of stock outstanding (first preferred stock, second preferred stock and common stock) of the St. Louis Bridge Co. during the years 1920, 1921, and 1922; the number of shares of stock voted at the annul meetings (first preferred stock, second preferred stock, and common stock) during the years 1920, 1921, and 1922, and the number of shares*2359  of stock (first preferred stock, second preferred stock and common stock) for which proxies had been given to individuals conferring the rights to vote said stock.  TotalTotalYearsharesTotalsharesoutstand-sharescoveredingvotedby proxie192079,90040,00645,028192179,90040,71643,542192279,90040,96441,164*194  During the year 1920, 15,006 shares of the total number of outstanding shares of stock during said year were voted by individuals who were officers of both the St. Louis Bridge Co. and the Terminal Railroad Association of St. Louis, who held proxies in their individual name or names.  During the year 1921, 15,716 shares of the total number of outstanding shares of stock during said year were voted by individuals who were officers of both the St. Louis Bridge Co. and the Terminal Railroad Association of St. Louis, who held proxies in their individual name or names.  During the year 1922, 15,964 shares of the total number of outstanding shares of stock during said year were voted by individuals who were officers of both the St. Louis Bridge Co. and the Terminal Railroad Association of St. *2360  Louis, who held proxies in their individual name or names.  The form of proxy used in each of the years 1920, 1921, and 1922 was as follows: KNOW ALL MEN BY THESE PRESENTS: That the undersigned hereby nominate, constitute and appoint W. S. McCHESNEY, JR., or FELIX E. ANDERSON, and each of them attorney and agent for and in name, place and stead, to attend any and all meetings of the stockholders of the St. Louis Bridge Company, whether general or special, wheresoever held and howsoever called, and at any adjournments thereof, and to vote for and in favor of any matter or thing which may be brought before the stockholders according to the number of votes the undersigned would be entitled to vote, if then personally present.  Dated this day of , nineteen hundred and Executed in presence of: Twenty-five thousand shares of stock voted during each of the years 1920 and 1921 was the common stock referred to in paragraph 7 of the lease dated July 1, 1881, quoted above, which said 25,000 shares were voted by Felix E. Anderson, who was, during each of the years 1920 and 1921, an officer of the St. Louis Bridge Co. and also an officer of the Terminal Railroad Association of St. Louis, *2361  and who held a proxy for the aforesaid 25,000 shares in his individual name.  The form of proxy used was as follows: KNOW ALL MEN BY THESE PRESENTS: That the Bankers Trust Company, as successor-Trustee under the indenture dated December 30, 1881, as modified by subsequent Agreement dated October 1, 1889, the undersigned stockholder in the ST. LOUIS BRIDGE COMPANY, does hereby constitute and appoint Thomas M. Pierce or F. E. Anderson, of St.  *195  Louis, Missouri, its true and lawful attorney, with power of substitution for and in its name, to vote at a meeting of the stockholders of said company to be held at St. Louis, Missouri, on Tuesday, the second day of March, nineteen hundred and twenty, or at any adjournment thereof, for the election of Directors only, with all the powers it would possess if then personally present.  IN WITNESS WHEREOF, said Bankers Trust Company, successor-Trustee, has caused these presents to be executed on its behalf by one of its Vice-Presidents, and its Corporate Seal to be attached hereto, attested by one of its Assistant Secretaries, this day of February, Nineteen hundred and twenty.  Twenty-five thousand shares of stock voted during the*2362  year 1922 was common stock referred to in paragraph 7 of the lease dated July 1, 1881, quoted above, which said 25,000 shares were voted by T. M. Pierce, who was, during the year 1922, an officer of the St. Louis Bridge Co. and also an officer of the Terminal Railroad Association of St. Louis, and who held a proxy for the aforesaid 25,000 shares of his individual name.  The form of proxy used was as follows: KNOW ALL MEN BY THESE PRESENTS: That the Bankers Trust Company, as successor-Trustee under the indenture dated December 30, 1881, as modified by subsequent Agreement dated October 1, 1889, the undersigned stockholder in the ST. LOUIS BRIDGE COMPANY, does hereby constitute and appoint Thomas M. Pierce or F. E. Anderson, of St.  Louis, Missouri, its true and lawful attorney, with power of substitution for and in its name, to vote at a meeting of the stockholders of said company to be held at St. Louis, Missouri, on Tuesday, the seventh day of March, nineteen hundred and twenty-two, or at any adjournment thereof, for the election of Directors only, with all the powers it would possess if then personally present.  IN WITNESS WHEREOF, said Bankers Trust Company, successor-Trustee, *2363  has caused these presents to be executed on its behalf by one of its Vice-Presidents and its Corporate Seal to be attached thereto, attested by one of its Assistant Secretaries, this day of February, nineteen hundred and twenty-two.  The following statement shows the number of shares of stock issued by the Tunnel Railroad of St. Louis which were outstanding during the years 1920, 1921, and 1922; the number of shares voted at the annual meetings during the years 1920, 1921, and 1922, and the number of shares of stock for which proxies had been given to individuals conferring the right to vote stock.  TotalTotalYearsharesTotalsharesoutstand-sharescoveredingvotedby proxies192012,5006,3567,002192112,5006,3567,026192212,5006,2776,659The shares of stock voted were voted by an individual (or individuals) who was an officer (or officers) of the Tunnel Railroad of St. Louis, and also an officer (or officers) of the Terminal Railroad Association *196  of St. Louis, who held proxies in their individual name (or names).  The form of proxy used in 1920, 1921, and 1922 was as follows: KNOW ALL MEN BY*2364  THESE PRESENTS: That the undersigned hereby nominate, constitute and appoint W. S. McCHESNEY, JR., or FELIX E. ANDERSON, and each of them attorney and agent for and in name, place and stead, to attend any and all meetings of the stockholders of the Tunnel Railroad of St. Louis, whether general or special, wheresoever held and howsoever called, and at any adjournments thereof, and to vote for and in favor of any matter or thing which may be brought before the stockholders according to the number of votes the undersigned would be entitled to vote, if then personally present.  Dated this day of , nineteen hundred and .  Executed in presence of OPINION.  PHILLIPS: Petitioners claim that during the years 1920, 1921, and 1922, they were affiliated with the Terminal Railroad of St. Louis and are entitled to file consolidated returns with that corporation.  See section 240, Revenue Acts of 1918 and 1921.  The same claim was made with respect to the years 1917, 1918, and 1919 and the Board, in , denied it.  The facts presented to us by the stipulation of the parties in the present proceeding are substantially different from*2365  those in the prior proceeding and generally are less favorable to the claim of the petitioners. There can be no question that the Terminal Railroad Association of St. Louis, so long as it performs the terms of its lease, controls the physical properties of the petitioners.  The test laid down by the statute for affiliation, however, is control of the stock by the same or closely affiliated interests.  This test is not met in this case.  . Decision will be entered for the respondent.