policies" at an increased premium, according to the terms of which at the end of each quinquennial period "the gross profits" of such policies were thus dealt with: two thirds were returned by way of bonus or abatement of premiums to the holders of such policies then in force; the remaining third went to the company, who bore the whole expenses of the business, the portion remaining after payment of expenses constituting the only profit available for division among the shareholders. It was held that the two thirds returned to the policy holders were "annual profits or gains" and assessable to income tax.

Last v. London Assurance Corporation, 12

Q. B. D. 389; 14 Q. B. D. 239; 10 App.
Cas. 438.

The interest arising from investments made by a life insurance company for the purposes of their business, income tax on which had been deducted at its source, exceeded the amount of the profits of the company for the year of assessment. The company had also during the year received interest on investments from which there had been no deduction for income tax. Held that the company were liable to assessment for an income tax in respect of such last mentioned interest.

Clerical, &c. Life Assurance Society v. Carter, 22 Q. B. D. 444.

See further New York Life Insurance Co. v. Styles, 14 App. Cas. 381; Gresham Life Assur

ance Society v. Styles, 24 Q. B. D. 500; 25 Id. 351; [1892] A. C. 309; Queen v. Commissioners of Income Tax, 21 Q. B. D. 313; Bartholomay Brewing Co. v. Wyatt, [1893] 2 Q. B. 499; London Bank of Mexico v. Apthorpe, [1891] 2 Q. B. 378; Dillon v. Haverfordwest Corporation, [1891] 1 Q. B. 575; Anglo-Continental Guano Works v. Bell, 38 Sol. Journ. 325. See also 13 Int. Rev. Rec. 33, 65, 73, 97, 98, 117, 169, 177, 185; 14 Id. 33, 57; 12 Id. 157. Ex parte Fairweather, 30 New Bruns. 531; Sullivan v. Robinson, 1 Pugs. & B. (New Bruns.) 431; Peters v. St. John, 21 Canada Supe. Ct. 674; Phoenix Ins. Co. v. Kingston, 7 Ont. 343.

"SECT. 36. That it shall be the duty of every corporation, company, or association doing business for profit to keep full, regular, and accurate books of account, upon which all its transactions shall be entered from day to day, in regular order, and whenever a collector or deputy collector of the district in which any corporation, company, or association is assessable shall believe that a true and correct return of the income of such corporation, company, or association has not been made, he shall make an affidavit of such belief and of the grounds on which it is founded, and file the same with the Commissioner of Internal Revenue; and if said Commis

sioner shall, on examination thereof, and after full hearing upon notice given to all parties, conclude there is good ground for such belief, he shall issue a request in writing to such corporation, company, or association to permit an inspection of the books of such corporation, company, or association to be made; and if such corporation, company, or association shall refuse to comply with such request, then the collector or deputy collector of the district shall make from such information as he can obtain an estimate of the amount of such income, and then add fifty per centum thereto, which said assessment so made shall then be the lawful assessment of such income."

"SECT. 37. That it shall be the duty of every collector of internal revenue, to whom any payment of any taxes other than the tax represented by an adhesive stamp or other engraved stamp is made under the provisions of this Act, to give to the person making such payment a full written or printed receipt, expressing the amount paid and the particular account for which such payment was made; and whenever such payment is made such collector shall, if required, give a separate receipt for each tax paid by any debtor, on account of payments made to or to be

made by him to separate creditors, in such form that such debtor can conveniently produce the same separately to his several creditors in satisfaction of their respective demands to the amount specified in such receipts; and such receipts shall be sufficient evidence in favor of such debtor to justify him in withholding the amount therein expressed from his next payment to his creditor; but such creditor may, upon giving to his debtor a full written receipt, acknowledging the payment to him of whatever sum may be actually paid, and accepting the amount of tax paid as aforesaid (specifying the same) as a further satisfaction of the debt to that amount, require the surrender to him of such collector's receipt."

APPENDIX.

P. 1. In 28 Am. Law Rev. 808 (soon to be issued), Mr. Robert Sewell discusses these decisions and the constitutionality of the new law at length, treating the earlier statutes as war measures and adverting to the placing of public burdens chiefly upon the rich and the Northern and Eastern portions of the country. See also Smedberg v. Bentley, 21 Int. Rev. Rec. 38; and the opinion of Messrs. E. Spencer Miller and William M. Evarts in 13 Int. Rev. Rec. 76.

P. 6. The tax imposed by § 4 of the New Brunswick Act 31 Vict. c. 36, upon 99 "income was held leviable in respect of the balance of gain over loss made in the fiscal year, and where no such balance of gain had been made, there was no income or fund which was capable of being assessed. It was also held that there was nothing in the section or context which should induce a construction of the word "income," when applied to the income of a commercial business for a year, otherwise than its natural and commonly accepted sense, as the balance of gain over loss. Lawless v. Sullivan, 6 App. Cas. 373, reversing 3 Canada Supe. Ct. 117; 2 Pugs.