Owen J. Roberts

“ In the ordinary affairs of life, no one stops for refined analysis of the nature of a premium, or considers that the periodic payment universally called 'interest' is in part something wholly distinct ”

“ Reference is made to the practice of bond buyers in determining the amount they will bid. It is said that a purchaser, in arriving at the price he is willing to pay for a bond, has regard to the current rate of interest for money, and, if the bond bears a stipulated rate in excess of the ruling rate, he will pay a premium. He does this although he knows that at maturity he can only receive the par of the bond, but considers that he will be repaid the premium by the excess of the agreed rate of interest over the rate he is content to receive. ”

“ Alworth-Stephens Co., 267 U.S. 364, 370, 45 S.C.t. 274, 276, 69 L. Ed. 660, 'the plain, obvious and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover.' This rule is applied to taxing acts. ”

“ Applying the accepted tests to the language of the statute, we are of opinion that the construction contended for by the Commissioner is inadmissible. In common parlance, the bonded indebtedness of a corporation imports the total face of its outstanding bonds; the amount which must be paid at their maturity. The phrase is not generally used to connote par plus an unreturned proportion of premium. ”

“ And as respects 'interest,' the usual import of the term is the amount which one has contracted to pay for the use of borrowed money. He who pays and he who receives payment of the stipulated amount conceives that the whole is interest. ”