dissenting: In Estate of Harry E. R. Hall, 29 B. T. A. 1255, we held that specialists on the Hew York Stock Exchange who were engaged in the business of buying securities and reselling them to customers, principally members of the Hew York Stock Exchange, were entitled under article 105 of Regulations 74 to compute net income upon the basis of inventories at market. I think there are no material differences between the facts in this case and those which obtained in the above cited case. Furthermore, I am of the opinion that the petitioners here substantially met the requirements of article 105 to qualify them as dealers in securities. They have an established place of business; they are regularly engaged in the purchase of securities and their resale to customers, and those purchases and sales are made with a view to the gains and profits that may be derived therefrom. If the regulation was intended to apply only to underwriters or distributors of securities that fact is not made plain by the terms of the regulation, nor can I understand why such merchants of securities should be favored by the respondent over brokers who make a practice of buying for their own account and selling to customers the securities thus bought with a view to gains and profits to be derived therefrom.
Substantially the question presented here was considered by the Circuit Court of Appeals for the Second Circuit in Harriman *644National Bank v. Commissioner, 43 Fed. (2d) 950. It was there held that a bank, maintaining a separate department for the buying and selling of securities, which sold securities when it thought the prices were reasonable, was a dealer in securities within the contemplation of article 1585 of Regulations 45, which corresponds with article 105 of Regulations 74.
As I see it, the only question which we have here is whether the petitioners qualify as dealers in securities as defined in the regulation. I think they do.
Black, McMahon, and Leech agree with this dissent.