Louis Brandeis

“ The technical distinction between capital, surplus, and undivided profits is obviously not applicable to the banking business when conducted by individuals or firms; and the distinction between surplus and undivided profits, while commonly observed by incorporated banks, is not ordinarily made by other business corporations. As it is the use or employment of capital in banking, not mere possession thereof by the banker, which determines the amount of the tax, the fact that a portion of the capital so used or employed is designated undivided profits is of no legal significance. ”

“ But while capital assets of a banker are not, as matter of law, exempt from taxation under the act of 1898 merely because they are designated undivided profits, undivided profits like any other part of the company's capital, may be free from the tax, because they were not, in fact, used or employed in banking. ”

“ In the main, the facts are similar to, and the questions of law are the same as, those considered in Fidelity & Deposit Co. v. United States, 259 U.S. 296, 42 Sup. Ct. 511, 66 L. Ed. --, decided this day. ”