Stanley Matthews

Name: Bailey v. New York Central Rail Road — Opinion of the Court
Author: Stanley Matthews

Summary

“Bailey v. New York Central Rail Road — Opinion of the Court”, is a work by Stanley Matthews. It explores elements such as earnings, certificates and dividends.

Quotes from Bailey v. New York Central Rail Road… (Stanley Matthews)

Stanley Matthews, Bailey v. New York Central Rail Road…

“ It is true, indeed, that by the terms of the law the amount paid as interest on bonds is charged with a tax as part of the earnings, although there may have been no net earnings out of which to pay it; but the law proceeds upon a presumption which disregards what is merely exceptional. And we have no hesitation in saying that, in reference to a dividend declared as of earnings for the current year and paid as such to stockholders, whether in money or in scrip, no proof would be admissible, for the purpose of avoiding the tax, that no earnings had in fact been made. ”

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Source: Wikisource

Stanley Matthews, Bailey v. New York Central Rail Road…

“ The tax for the year is upon the whole amount of the net earnings, distributed and enumerated under the heads pointed out in the statute, and when the tax has been imposed and collected upon them, or any specific part of them, there is no authority to levy any further additional tax. The profits that this year have been taxed as undivided, and invested in any corporate asset, if in the succeeding year it is embraced in a dividend declared and payable to stockholders, have already borne all the burden imposed by the law, and cannot again be subjected to an assessment for a new tax. ”

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Source: Wikisource

Stanley Matthews, Bailey v. New York Central Rail Road…

“ In every well-conducted corporation of this character these profits were disposed of in one of four methods, namely, distributed to its stockholders as dividends, used in construction of its roads or canals, paid out for interest on its funded debt, or carried to a reserve or other fund remaining in its hands. Looking to these modes of distribution as the surest evidence of the earnings which congress intended to tax, and as less liable to evasion than any other, the tax is imposed upon all of them. ”

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Source: Wikisource

Stanley Matthews, Bailey v. New York Central Rail Road…

“ There has been a difference of opinion upon the point, whether the tax imposed by this section is upon the corporation on account of its net profits, or upon the income of the stockholder or bondholder, although in the present case it is immaterial which of these alternatives is adopted. We are not aware, however, that it has ever been suggested, until now, that it might be both in succession; one year a tax upon the income of the corporation, and the next upon the same fund as the income of the individual. ”

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Source: Wikisource

Stanley Matthews, Bailey v. New York Central Rail Road…

“ On the first trial of the case, the circuit court charged the jury that the assessment was wholly illegal and void, the certificates not being a scrip dividend within the meaning of the law, and furnishing no basis for the assessment of any tax whatever, and that consequently their verdict must be for the plaintiff. ”

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Source: Wikisource

Stanley Matthews, Bailey v. New York Central Rail Road…

“ It is there stated that 'interest certificates of the kind were issued as evidence to the stockholders that an equal amount of the earnings of the company beyond current expenses had been expended for the objects stated in the preamble of the certificates, and to show that the respective stockholders were entitled to reimbursement of such expenditure at some convenient future period, and also to show that the stockholders were entitled to dividends on the same whenever dividends were paid on the shares of the capital stock ”

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Source: Wikisource

Stanley Matthews, Bailey v. New York Central Rail Road…

“ On December 19, 1868, the New York Central Railroad Company, afterwards merged by consolidation into a new corporation, the defendant in error, adopted a preamble, resolutions, and sertificate, of which the following is a copy:
'Whereas, this company has hitherto expended of its earnings for the purpose of constructing and equipping its road, and in the purchase of read estate and other properties, with a view to the increase of its traffic, moneys equal in amount to 80 per cent. ”

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Source: Wikisource

Stanley Matthews, Bailey v. New York Central Rail Road…

“ It was equally legitimate for the secretary of the treasury, upon proof that the accumulation had been going on from the organization of the company, in 1853, to apportion the amount in equal proportions for each year, and to deduct nine-fifteenths thereof for the years which had elapsed before the taking effect of the act taxing incomes. ”

Stanley Matthews

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Quotes from Bailey v. New York Central Rail Road… (Stanley Matthews)

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