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42

available for dividends, but is also contrary to the con-

struction which must be given to the statute if considera-

tion be given to its historical development as set forth

herein. Such consideration conclusively establishes that

an operating deficit existing on March 1, 1913 must be

offset by subsequent earnings or profits before there can

be "earnings or profits accumulated after February 28,

1913."

The decision of the Tax Court of the United States

should be affirmed.

Dated, San Francisco, California,

March 7, 1951.

Respectfully submitted,

Leon de Fremery,

Morrison, Hohfeld, Foerster,

Shuman & Clark,

Counsel for Respondents.

Walter Slack,

Counsel for Alma de Bretteville Spreckels,

Respondent in No. 12,657 and Counsel

for Spreckels-Rosckrans Investment Com-

pany, John N. Rosekrans and Alma

Spreckels Rosekrans, Respondents in Xo.

12,663.

(Appendix Follows.)

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