US SUPREME COURT DECISIONS

The provisions in the Act of June 30, 1884, 13 Stat. 284, c. 173, § 122, and in the Act of June 13, 1868, 14 Stat. 139, c. 184, § 9, that the profits of a railroad company carried to the account of any fund, or used for construction shall be subject to and pay a tax, do not apply to earnings by a railroad company which are used for construction or carried to a fund unless, on a rest made and balance struck for the period for which the tax is demanded, the operations of the company show a profit. In this respect, the rule in the statute differs from that which it lays down in respect to earnings used to pay interest or dividends, which were taxable whether there were actual profits or not.

In a suit to recover taxes alleged to be in arrear on the profits of a railroad company carried to a fund or expended in construction, the burden of proof is on the United States to show that the company earned such profits, and that losses shown by the company were not suffered during the period.

When the law is settled in the court above, but the findings show uncertainty as to the facts on which judgment is to be based, the cause should be remanded for such further proceedings to be had in the inferior court as the justice of the case may require.

Action to recover five percent tax on profits alleged to have been carried to a fund, or expended in construction. All the chanrobles.com-redchanrobles.com-red

Page 108 U. S. 278

material facts necessary to the comprehension of the controversy are stated in the opinion of the Court.