Cary v. Savings Union
Supreme Court of the United States
Error to the Circuit Court for the District of California; the case being thus: An act of Congress passed in 1864, as amended in 1866,* enacted that there should be levied and collected a tax of five per centum on all dividends thereafter declared due, wherever and whenever the same should be payable to depositors as part of the earnings, income, or gains of any savings institution: “ Provided, That the annual or semi-annual interest allowed or paid to the depositors in…
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Error to the Circuit Court for the District of California; the case being thus: An act of Congress passed in 1864, as amended in 1866,* enacted that there should be levied and collected a tax of five per centum on all dividends thereafter declared due, wherever and whenever the same should be payable to depositors as part of the earnings, income, or gains of any savings institution: “ Provided, That the annual or semi-annual interest allowed or paid to the depositors in savings banks or savings institutions shall not be considered as dividends.” This statute being in force, Cary, collector of…
1Opinion of the Court
The CHIEF JUSTICE
delivered the opinion of the court.
A distinction is expressly recognized in the act of Congress between interest and dividends, and the Circuit Court ■decided that the payments to the depositors were for dividends. The question is whether this decision was correct.
We think it was. The depositors contracted not for a rate of iuterest to be paid upon their deposits, but for a share of the profits of the business in which their money was, by agreement, to be employed. It is true that the profits of the company were principally to be derived from interest upon loans made, but…
2Cited by1 opinion
- Cary, Collector v. The Savings UnionSupreme Court of the United States · 1875