Joseph P. Bradley

“ The accruing interest on the subsidy bonds loaned by the government to the company is payable by the company at a future day, to-wit, at the maturity of the bonds; and if a sufficient amount of the company's annual net earnings is laid aside (as it should be) to meet that interest when it shall become due, the amount so laid aside would be directly within the scope of the internal revenue act, as it stood when the net earnings in question arose. ”

“ The 122d section of that act, as amended in 1866, imposed a 5 per cent. tax, not only on all payments of interest due on bonds and on all dividends declared by any railroad or canal company, but also on 'all profits of such company carried to the account of any fund, or used for construction.' The profits here referred to are the profits arising from the operation of the road or canal without deduction of interest paid to its bondholders, or dividends paid to its stockholders, and correspond to the phrase 'net earnings' used in the stipulation of the parties in this case. ”

“ United States
This was an action brought by the United States against the Sioux City & Pacific Railroad Company to recover certain arrears of taxes alleged to have accrued from November, 1868, to September, 1871, inclusive. ”