estate had been increased in value by the erection of buildings, either within the prescribed time, or within some period previous, did not render any part of the receipts of sale taxable. 1 Int. Rev. Rec. 196.

That profits and losses within 1867 on sales of real estate purchased since December 31, 1864, should be returned. 7 Int. Rev. Rec. 60. As to points in case of underlying coal, see 7 Int. Rev. Rec. 60; 5 Int. Rev. Rec. 154. It was held that the profit on the sale of mined coal by the miner was the difference between the amount received and the expense of production (excluding all deductions for the personal service of the miner and family) plus the amount paid for each ton to the owner or lessor of the mine; and the profit of the owner or lessor of the mine thus receiving pay from the lessee or miner was the difference between the amount received for each ton and the estimated amount paid for each originally. 7 Int. Rev. Rec. 60.

That the profit realized on a sale of standing or felled timber was returnable, irrespective of the time when the land was purchased; that timber was converted into personalty by severance from the land on which it grew, and profits from the sale thereof were as liable to the tax as those from the sale of other prod

ucts of the soil, or from mines, and that a farmer who kept woodland to cut and sell firewood, or a proprietor who sold to others the privilege of cutting, etc., the timber, should be required to estimate the receipts as a part of his income. Bout. (1863), 301; 1 Int. Rev. Rec. 171.

That when timber was sold standing the taxable profits were arrived at by estimating the value of the land after the timber was removed and adding the net amount for the timber, and from this sum deducting the estimated value of the land at the beginning of the income year. 7 Int. Rev. Rec. 58. As to the expense of cutting the timber and carrying it to market, see 41 U. S. Rev. Journ. 98.

That profits on the sales of personal property should be assessed irrespective of the time when purchased, and that the rule relating to realty did not apply to personalty. 41 U. S. Rev. Journ. 98.

That leases were personal property. 7 Int. Rev. Rec. 59; 2 Id. 44.

That a mining claim arising from the location of a mine on the public mineral lands was personal property, and the difference between the actual cost and the price received from the claim was the profits. 4 Int. Rev. Rec. 124.

The present law is intended to cover sales

and dealings in real estate, and it is probable that, if a person sells to-day at a profit real estate which he purchased five years ago, the money would be free from tax.

Interest, Rent, Dividends, Securities.

It was held in Barnes v. Railroads, 17 Wall. 294, that interest or dividends which accrued before January 1, 1870, were taxable, though payable or declared on or after the date named.

Interest on railroad bonds earned in 1871 but payable by the coupons in 1872 was held not subject to the tax authorized by the act of 1870 to be collected in 1871. United States v. Indianapolis Railroad Co., 113 U. S. 711.

It was held in Stockdale v. Insurance Companies, 20 Wall. 323, that whether the tax on dividends from the earnings of corporations for 1869 be viewed as a tax on the shareholder or on the corporation, it was intended to tax the earnings for that year by the section which limited the duration of the income tax.

Section 117 of the act of 1864, which required stockholders in certain companies to return as income all gains and profits to which entitled, whether "divided or otherwise," was held to embrace not only dividends declared, but profits not divided and invested partly in real estate, machinery, and raw material, and

partly applied to the payment of debts incurred in previous years. Collector v. Hubbard, 12 Wall. 1; 35 Conn. 563.

It was held in United States v. Central Nat. Bank, 24 Fed. Rep. 577, that when taxes imposed by a State law are imposed upon the stockholders of a national bank, and not upon the corporation, the failure of the bank to return and pay a tax upon such part of its dividends declared within the year as was represented by the amount paid for such state tax, would not entitle it to exemption to that extent from the tax under the act of 1866, and the bank having declared a dividend as of earnings for the current year, and paid it as such to the stockholders, proof, to avoid the tax, that no earnings had been made because of the defalcation of the cashier, was inadmissible.

The act of Congress of July 14, 1870, relating to the taxation of railroad bonds, was part of the general system of income taxation, and fixed a time when that system should expire; and, in taxing the interest on such bonds as part of the corporate earnings, it applied only to interest actually paid, not to that merely payable. United States v. Louisville R. Co., 33 Fed. Rep. 829.

An insurance company, a stockholder in a

bank, received a dividend, three-tenths from profits accumulated before the first act for collecting internal revenue, and seven-tenths from profits acquired afterwards. The bank, more than five years before the case was tried, had paid the revenue tax on the seven-tenths and denied a liability to taxation for the threetenths, and it had never been enforced. Held, that the three-tenths was capital, and not liable to assessment as income, under the act of June 30, 1864 and that the seventh-tenths having been once assessed to the bank, could not be again assessed to the insurance company. Merchants' Ins. Co. v. McCartney, 1 Lowell, 447; 12 Int. Rev. Rec. 122.

It was further held under the old Acts

That where a railway company paid to alien non-resident holders of its bonds the entire interest due from time to time thereon, no claim having been made here against it for any penalty, it was liable to the United States for five per cent on the amount so paid, with interest thereon at the rate of six per cent per annum. United States v. Erie Railway Co., 106 U. S. 327.

That interest accrued during the previous year on United States securities should be returned. 7 Int. Rev. Rec. 60.

That interest accrued during the income