
    MARR v. THE UNITED STATES
    [58 C. Cls. 658; 268 U. S. 536]
    Judgment was rendered in favor of the United States in the court below. On appeal the judgment was affirmed, the Supreme Court deciding;
    A Delaware corporation, organized for the purpose, took over the assets and continued the business of a New Jersey corporation, assuming its liabilities, after an exchange of stock, as follows: The New Jersey corporation had outstanding $15,000,000 of 7 per cent preferred and $15,000,000 common stock, all shares of the par value of $100, and had accumulated a large surplus from profits, the actual value of the common stock being $842.50 per share; the Delaware corporation had an authorized capital of $20,000,000 in 6 per cent nonvoting preferred stock and $82,600,000 in common shares, all of the par value of $100, and exchanged five shares of its common stock for every like share in the New Jersey corporation, and one and one-third shares of its preferred stock for every like share in the New Jersey corporation, making payments in cash to avoid fractional certificates; and thus all the stock of the New Jersey corporation was exchanged, except a few shares of preferred stock redeemed in cash, and the Delaware corporation had $7,600,000 of authorized common stock remaining which was sold or held for sale for additional capitál. Held that the new securities thus received by an old stockholder were not in effect a stock dividend; and that their value above the cost of Ms exchanged securities, bought by him prior to March 1, 1913, was taxable as income under the act of September 8th, 1916, and within the power of Congress so to tax, since the corporations were essentially different, being organized in different States and with different rights and powers, and since the shares exchanged represented different interests both because of these differences in the corporations and because a 6 per cent nonvoting preferred stock differs essentially from a 7 per cent voting preferred stock, and common stock subject to the priority of $20,000,000 preferred and a $1,200,000 annual dividend charge differs essentially from a common stock subject only to $15,000,000 preferred and a $1,050,000 annual dividend charge. Msner v. Maconiber, 252 U. S. 159, and Weiss v. Steam, 265 U. S. 242, distinguished.
    June 1, 1925.
   Mr. Justice BeaNdeis

delivered the opinion of the Supreme Court  