dissenting: Section 233 of the Revenue Act of 1926 provides in part as follows: .
(b) In tbe ease of a foreign corporation, gross income means only gross income from sources witbin the United States, determined (except in tbe case of insurance companies subject to tbe tax imposed by sections 243 or 246) in tbe manner provided in section 217.
Section 217 provides, in part, as follows:
(a) In tbe case of a nonresident alien individual * * * tbe following items of gross income shall be treated as income from sources witbin tbe United States:
(1) Interest on bonds, notes, or other interest-bearing obligations of residents, corporate or otherwise, not including (A) interest on deposits with persons carrying on tbe banking business paid to persons not engaged in business within tbe United States and not having an office or place of business therein, * * *
* * * * * • * *
(c) Tbe following items of gross income shall be treated as income from sources without tbe United States:
(1) Interest other than that derived from sources witbin tbe United States as provided in paragraph (1) of subdivision (a).
The prevailing opinion of the Board holds, in accordance with Stockholms Enskilda Bank, 25 B. T. A. 1328, that the interest paid on refunds of Federal income taxes is not income from sources within the United States within the purview of section 217 (a)(1), above quoted. In that case we denied the petitioner’s contention that the interest thus received was not on “ interest-bearing obligations ” within the purview of section 217(a) (1), but gave judgment for the petitioner upon the ground that the United States was not *229a “ resident ” of the United States within the contemplation of the applicable provision of the statute. With this conclusion I can not agree.
The manifest intention of the statute was to include in the income of foreign taxpayers interest upon all obligations where the interest was paid by corporations or other payors which might be classed as “residents.” The statute then provides in subdivision (c) of section 217 that all other interest received by nonresidents shall be regarded as from sources without the United States. It seems to me utterly incompatible with a reasonable construction of the statute that interest paid by the United States Government is to be regarded as from a source without the United States, and that is necessarily the conclusion of the Board in the Stockholms Enskilda Bank case. I can see no reason for construing the statute as exempting from income tax the interest paid on refunds of Federal income taxes received by foreign corporations transacting business and having an office in the United States, as was the petitioner, and subjecting to tax a domestic corporation in similar circumstances, as was done in American Viscose Corp., 19 B. T. A. 937; affirmed by the Circuit Court of Appeals for the Third Circuit in American Viscose Corp. v. Commissioner, 56 Fed. (2d) 1033.
If the United States is not a “ resident ” of the United States within the contemplation of the statute, of what country is it a “ resident? ” In Van Brocklin v. State of Tennessee, 117 U. S. 151, the Supreme Court, quoting Chief Justice Marshall, said:
* * * The United States is a government, and consequently a body politic and corporate, capable of attaining the objects for which it was created, by the means which are necessary for their attainment. This great corporation was ordained and established by the American people and endowed by them with great powers for important purposes. * * *
In United States v. Borcherling, 185 U. S. 223, 233, it was stated:
In Vaughn v. Northrup, 15 Pet. 1, Mr. Justice Story, delivering the cpinion of the court, said: “ The debts due from the government of the United States have no locality at the seat of government. The United States in their sovereign capacity have no particular place of domicile, but possess, in contemplation of law, an ubiquity throughout the United States; and the debts due by them are not to be treated like the debts of a private debtor, which constitute local assets in his own domicile,” and accordingly it was held, in that case, that “ the administrator of a creditor of the government duly appointed in the State where the creditor was domiciled at the time of his death, has full authority to receive payment and give a full discharge ctf the debt due his intestate in any place where the government may choose to pay it, whether it be at the seat of government or at any other place where the public funds are deposited; and that moneys so received constituted assets * *
See also Mackey v. Coxe, 18 How. 100, 105; Wyman v. Halstead, 109 U. S. 654. I am of opinion that interest received by a foreign *230corporation upon refunds of Federal income taxes paid by the United States Government constitutes income from a source within the United States within the meaning of the statute.
Seawell agrees with the above dissent.