dissenting: I disagree with the decision that the petitioner was exempt for 1924. For that year the right to exemption is governed, not by section 231 (12) of the subsequently enacted Revenue Act of 1926, which was made effective by section 286 only as early as January 1, 1925, but by the Revenue Act of 1924, the descriptive provisions of which in section 231 (11) were different. Had Congress chosen to do so, it might retroactively have modified the law as to 1924. It did not do so, but confined the new standards of exemption prospectively to periods after January 1, 1925. The, legislative reports in respect of the bill which became the Revenue Act of 1926 are not the law of 1924, and áre useful only to throw light on the interpretation of the Act of 1926. The Board may not treat them as binding interpretations of the preexisting law passed by an earlier Congress. Nor may the Board treat as authoritative the regulation of the Commissioner which not merely resolves an ambiguity or provides for the enforcement of the statute, but plainly broadens its clear provisions. There is no force to be attached to our opinion that the regulation is “ reasonable.” This is especially true when, despite the regulation, the Commissioner invokes the statute which he is presumably applying uniformly to all similar organizations. There is no more reason to apply the tests of the 1926 Act to the year 1924 than to the years 1920 and 1921, and I believe the refusal to do so in Riverdale Co-operative Creamery Association, 18 B. T. A. 1159 (now on review), was correct.
For 1924, the petitioner filed a return as a taxable corporation having insufficient income to bring about a tax. No claim for exemption was made. Later, when the Commissioner disallowed some of its deductions, it claimed exemption. There appear in this record varying statements made by the petitioner’s representatives *270from time to time as to the number of members, nonmember producers, and nonproducer members, such as bankers, a lawyer, a drug company, a lumber company, and retired farmers. Taking these various statements at the most favorable to the petitioner, as the Board now does, there is a large number who are not members within the terms of the 1924 Act, cf. Riverdale Co-operative Creamery Association, supra, and since an exemption provision must be strictly construed, the Board has no authority to override the Commissioner’s denial of the exemption.
While I concur in the decision holding petitioner exempt as to 1925, I do not agree that the meaning of the words “ substantially all ” is governed by the construction placed on the highly controversial affiliation provisions of the Revenue Acts of 1918 and 1921. That controversy was provoked by the difficulties of the now obsolete consolidated returns provisions and it raged so furiously that Congress finally put it at rest by removing the words from the act. I think it is unnecessary and unsound to project that field of coritroversy into this exemption provision, the application of which must turn on different considerations.
Marquette, Phillips, and Murdock agree with this dissent.