Opinion of the Court 92 C. Cls. of the stock in a subsequent year when it makes its declaration for the first year. The value of stock in a going and operating concern is always based largely on an estimate of the amount of profit which it will make in future years. In fact this is usually the most important consideration. In Rosoff Tunnel Corporation v. Higgins, 28 Fed. Supp. 880, 881 (a capital stock case), it is said: * It is elementary in the business world, that businessmen every day must commit themselves upon the future prospects and anticipatory profits of their businesses. They are called upon to estimate the demands, the whims, and the hazards of the trade; and the common experience of men, as shown by the majority of successes, has proven that, on the whole, these estimates have been correct. Under the theory advanced by plaintiffs this estimate would be a mere guess. Another peculiar feature of these cases is that the petitions of plaintiffs and the arguments made show that each of them was in fact not trying to fix a fair value on its stock but "guessing" at a valuation which would give them a large excess-profits credit, and thereby enable the corporation to escape paying any excess-profits taxes. If this attempt to avoid taxation was not entirely successful and resulted, as is contended, in plaintiffs paying a larger stock tax than would have been paid if a fair value had been declared, the taxpayers have no one to blame but themselves. As has been said in several cases, while the statute did not require the use of the actual or fair value of the stock, the intent of the statute was that a fair valuation should be stated, and it was purposely so framed in connection with the excess-profits-tax statute as to encourage the statement of a fair value and to tend to make it unprofitable to attempt to avoid taxation. We think the statutory provisions enacted for this purpose were just and fair instead of being arbitrary and unreasonable. In the cases now before us it is again urged that the tax is arbitrary and discriminatory and that this is shown by examples of supposititious cases, and as it is applied in the cases before us. Nothing new is presented in the argument 159 Opinion of the Court in support of this contention, which is considered and reviewed at length in the case of Allied Agents, Inc., v. United States, supra. We think it unnecessary to add anything to what we said in that opinion in which we called attention to the now well-established rule that it is impossible to adjust many taxes so that they will apply with uniformity to each and every taxpayer, and gave the reasons upon which it is based. The wartime excess-profits tax was often and unavoidably discriminatory-so much so that a provision was made for special assessments (in the discretion, however, of the Commissioner), but it was held constitutional. We think that in comparison the provisions under consideration when followed in good faith by the taxpayer will produce less discrimination. The conclusions stated above relate to questions that have arisen before and have often and uniformly been decided against the contentions of plaintiffs here made. The reasoning in some of the opinions rendered is so cogent and convincing that we would set it out were it not for the fact that to do so would unduly extend the length of this opinion. Some other questions are raised by counsel, but all, with one exception which we shall mention later, are covered by the opinion of this court in the case of Allied Agents, Inc., supra, and the decisions cited below. Among the cases supporting the views we have expressed are Rosoff Tunnel Corp. v. Higgins, 28 F. Supp. 880; Midvale Paper Board Co. v. United States, 31 F. Supp. 851; Stromberg-Carlson Mfg. Co. et al., v. McGowan, 32 Fed. Supp. 101; Hornell Ice & Cold Storage Co. v. United States, 32 Fed. Supp. 468; Mountain Iron Co. v. United States, 31 Fed. Supp. 895. In the following-named cases the constitutionality of the tax was sustained without opinion: Gary Land Co. v. Smith (S. D. Ind.), decided January 22, 1940; Utah Oil Refining Co., v. Hinckley (Utah), decided February 20, 1940; Oil Well Supply Co. v. Thomas (N. D. Texas), decided February 20, 1940; Southeastern Compress & Warehouse Co. v. Page (N. D. Ga.), decided March 20, 1940. Opinion of the Court 92 C. Cls. The cases of Stromberg-Carlson Mfg. Co. v. McGowan, supra, and Hornell Ice & Cold Storage Co. v. United States, supra, involved not only the year in which the declaration of stock value was made but also a subsequent year, and in each case the court sustained the validity of the statute. One new objection is made to the tax in cases Nos. 43929 and 43947. It is claimed that the tax is retroactive and void because "Section 215 of the N. I. R. A. was adopted on June 16, 1933, and the first taxable year for which the capital stock is imposed is the entire year ending June 30, 1933. Section 701 of the Revenue Act of 1934 was adopted on May 10 1934, and the first taxable year for which the capital stock tax is imposed is the entire year ending June -30, 1934." In support of this contention it is argued that the capital stock tax is an excise tax with reference to the privilege of doing business and that the imposition of the taxes for the periods prior to the enactment of the Acts in question is unreasonable, discriminatory, and in violation of the Fifth Amendment to the Constitution. The basis of this argument cannot be maintained. There is no tax levied for the period prior to the enactment of the taxing act. The tax is imposed not for doing business during the whole of the taxable year but for doing business in "any part of such year." The corporation did carry on business during a part of such year and hence was subject to the tax for so doing after the enactment of the statute and not before. We see nothing retroactive in this as the tax was measured not in accordance with the length of time that the corporation was in business but according to the value of its capital stock. We think it was quite within the power of Congress to so establish it, and that it was not so arbitrary or discriminatory as to make it unconstitutional. The demurrer is sustained and the plaintiff's petition dismissed in No. 44848, No. 43929, and No. 43947. It is so ordered. WHITAKER, Judge; LITTLETON, Judge; and WHALEY, Chief Justice, concur. 167 Reporter's Statement of the Case CHICAGO TELEPHONE SUPPLY COMPANY, A CORPORATION, v. THE UNITED STATES [No. 43656. Decided November 12, 1940] On the Proofs Capital-stock tax and excess-profits tax; constitutionality.—Following the decision in Servel, Inc. v. United States, United Motors Service, Incorporated, v. United States, and General Motors Corporation v. United States, ante p. 159, it is held that the statutory provisions are constitutional which require that when the corporation taxpayer has declared the value of its capital stock, pursuant to section 701 of the Revenue Act of 1934, such value must be used as the basis of excess profits taxes for a subsequent year, notwithstanding it is established that the actual value of the corporation's capital stock was greatly in excess of the amount declared. See also Haggar Company v. Helvering, 308 U. S. 389; Allied Agents, Inc. v. United States, 88 C. Cls. 315; 308 U. S. 561. Same. The capital-stock tax and the excess-profits tax are so interrelated that they cannot be properly considered separately. Same; declared value.-Under the statute levying the capital-stock tax, the "value" as used in subsection (f) of section 701, Revenue Act of 1934, is the "declared value" of the capital stock, which need not conform to the "actual value" of the capital of the corporation. Same. Where in the instant case the declared value of the corporation's capital stock as of June 30, 1934, was $430,000 and the adjusted declared value as of June 30, 1935, was $509,980.79 and where plaintiff now asserts that the actual value of its capital stock at all times during the years 1934 and 1935 was in excess of $1,310,000; it is held that such a gross discrepancy shows clearly that plaintiff was making no effort to declare the true value of its capital stock but on the contrary was making an effort to avoid being taxed in the manner intended by the statute; it is not a valid objection to the statute that it is so framed as to counteract in some degree efforts of this kind. The Reporter's statement of the case: Mr. Edward J. Metzdorf for the plaintiff. Mr. Assistant Attorney General Samuel O. Clark, Jr., for the defendant. Messrs. Robert N. Anderson, Fred K. Dyar, and George H. Foster, were on the brief. Reporter's Statement of the Case 92 C. Cls. The court made special findings of fact as follows, upon a stipulation of the facts and the evidence adduced: 1. The Chicago Telephone Supply Company is a corporation organized and existing under and by virtue of the laws of the State of Indiana, with its principal office and place of business in the City of Elkhart, Indiana. 2. For the year 1935 plaintiff filed its income and excess profits tax return on March 7, 1936. This return reported a net income of $163,881.44, upon which an excess-profits tax of $5,213.66 was computed and an income tax of $22,533.70. The total tax thus reported was paid in installments on March 15, June 15, September 15, and December 15, 1936. The excess-profits tax was based on the amount of $476,865.25, this being the amount reported on the return as the adjusted declared value as shown in the capital stock tax return for the year 1935. 3. On July 30, 1935, plaintiff filed its capital stock tax return for the year ended June 30, 1935. This return reported the declared value of the capital stock as of June 30, 1934, as $430,000 and the adjusted declared value of the entire capital stock as of June 30, 1935, as $509,980.79. On this return the sum of $509 as capital stock tax was paid. Later the Bureau of Internal Revenue adjusted the declared value by eliminating a deduction of $19,969.22, producing an adjusted declared value of $529,950.01. Thereupon, an additional capital-stock tax of $20 was assessed and paid. 4. On February 15, 1937, plaintiff filed a claim for refund, a copy of which is attached to the stipulation of facts filed herein on January 24, 1940, marked "Exhibit A,” and is by reference made a part hereof. Said claim was rejected February 9, 1938, following the filing of the suit herein. 5. The correct net income of the plaintiff for the year 1935 was $163,181.84 and the correct income tax $22,437.50. The correct computation of the adjusted declared value for the year 1935, on the basis of the Commissioner's interpretation of the Revenue Act of 1934, namely, that the taxpayer is bound by the initial declaration of value of its |