Opinion by
Mb. Justice Jones,An inter vivos trust was created in 1935 by H. T. Hallowell (settlor) by transferring to his son, H. T. Hallowell, Jr., as trustee, 1,000 shares of Standard Pressed Steel Company common stock. In the trust agreement, the settlor directed that: the trustee “shall hold the said shares of stock and any stock dividends paid thereon intact”;1 the net income to be paid to settlor’s wife during her life; upon the life tenant’s death, one-half of the trust fund be distributed to settlor’s son 2 and the other one-half be held in trust for settlor’s daughter. Settlor died in 1955. Upon the life tenant’s death in 1966, the trustee filed his account and, upon the filing of that account, the instant controversy arose.
In the years 1955 through 1961—that is, subsequent to settlor’s death and during the life tenant’s lifetime— *187the trustee received certain dividends from Standard Pressed Steel Company which dividends were paid in common stock of said company, were of the same class and were all at the rate of 6% or less when paid. Upon receipt of such stock dividends, the trustee, acting in accordance with settlor’s di/rection in the trust instrument, allocated such dividends to principal. Those dividends, totalling 24,684.83 shares, had a market value at the time of the life tenant’s death of $433,-527.33. The instant controversy, between the life tenant’s estate and the settlor’s son and daughter, remaindermen under the trust, arises over the allocation of these dividends. The life tenant’s estate contends it is entitled to such dividends as income by reason of the operation of the Statute Against Accumulations,3 and our decision in Pew Trust, 411 Pa. 96, 191 A. 2d 399 (1963), despite the settlor’s expressed direction such dividends be treated as principal,-, the trust remaindermen contend neither Pew nor the Statute Against Accumulations, supra, proscribes the treatment of such dividends as principal while the clearly expressed intent of the settlor and the provisions of the Principal and Income Act of July 3, 1947 (P. L. 1283, §5, 20 P.S. §3470.5) dictate that such dividends be deemed principal.4
The Orphans’ Court of Montgomery County decided the stock dividends should be treated as income and not principal and awarded the dividends to the life *188tenant’s estate. The court’s opinion summarizes its reasons: “(1) the Principal and Income Act does not apply to stock dividends of six per cent or less; (2) stock dividends of six per cent or less are income, except that the testator or settlor may direct to the contrary if such direction is valid otherwise;5 (3) a direction to accumulate stock dividends of six per cent or less is not valid if and when it violates the Act of 1853.”6 We believe that such decree is erroneous and must be reversed.
Certain facts are undisputed: (a) this trust antedated the 1945 and the 1947 Principal and Income Acts; (b) the dividends involved are at the rate of six per cent or less, payable in stock of the same class of the same company; (c) all the dividends were received at times when the 1947, i.e., the second, Principal and Income Act7 was in effect; (d) that statute declared that “All dividends on shares of a corporation forming a part of the principal which are payable in the shares of the corporation itself of the same kind and rank as the shares on which such dividend is paid shall he deemed ¡principal”8 (Emphasis supplied); (e) the settlor clearly and unequivocally expressed his intent that all stock dividends—large or small, ordinary or extraordinary—of Standard Pressed Steel Company be treated as principal and not income. The result reached by the court below ignores the settlor’s *189clear direction and intent and the explicit language of the 1947 statute; it would overrule, in large measure, the rationale of our recent decisions in Catherwood Trust, 405 Pa. 61, 173 A. 2d 86 (1961), McEldowney Estate, 415 Pa. 87, 202 A. 2d 100 (1964), Norvell Estate, 415 Pa. 427, 203 A. 2d 538 (1964), cert. denied, 380 U.S. 913, 85 S. Ct. 900 (1965), Reznor Estate, 419 Pa. 188, 213 A. 2d 791 (1965) and Arrott Estate, 421 Pa. 275, 217 A. 2d 741 (1966) and would create in this area of the law the confusion and chaos which we have studiously endeavored to avoid.
The “rules in regard to allocation [of stock dividends] were devised to achieve a fair apportionment between beneficiaries and remaindermen, for the purpose of carrying out the putative intent of the settlor of the trust” and these “same rules should not be used where the settlor’s intent has been expressed with sufficient clarity, and where the question is whether the settlor’s expressed intent is to be defeated." See: 44 Cornell Quarterly 284, 290 (1959).
It was the theory of the court below that all small stock dividends, i.e., at the rate of six per cent or less, whether received prior to the passage of the 1945 and 1947 Principal and Income statutes when the so-called Pennsylvania Rule of Apportionment prevailed or subsequent to the passage of and during the time when the 1945 and 1947 Principal and Income statutes were in effect, must be considered income not principal, and that, despite what these statutes declare and, even though the settlor has clearly expressed his intent such dividends be considered principal and not income, the Act Against Accumulations strikes down the settlor’s intent because such intent contravenes the public policy expressed in the accumulations statute. Both premises, in our opinion, are erroneous.
With certain inapplicable exceptions, the Act Against Accumulations strikes down the accumulation *190of “rents, issues, interest or profits” and, although not specifically mentioned or stated in the statute, the statutory phraseology embraces “income”. See: Gather-wood Trust, supra, at p. 68. However, unless an item is “income”, an accumulation thereof is neither illegal nor unlawful. In this posture, we must, therefore, initially, determine whether, when these dividends were received, such dividends were deemed income or principal in deciding what, if any, impact the accumulations statute had on these dividend distributions. In Maris Estate, supra (1930), the testator, providing for the division of his residuary estate into three parts upon the life tenant’s death, stated that “all stock dividends consisting of shares of stock of the corporation issuing them shall be considered as principal.” This Court, concluding that such a testamentary provision did violate the Act Against Accumulations, supra, stated: “No one can be permitted to set aside the public policy of the State by the simple expedient of designating by another name that which the courts have repeatedly decided to be income” (p. 23). Hoavever, the Maris Court clearly indicated that its ruling Avas dictated by the fact that, at that time, the Pennsylvania Rule of Apportionment (now abolished by Catherwood) was in effect. Illustrative that such apportionment rule motivated the result is the following language from Maris (pp. 24, 25) : “This provision, so far as the items now in controversy are concerned, runs counter to our established rule of property that such dividends, earned after the death of the testator, which do not decrease the intact value of the stock as of that date, are income,—a rule that cannot be avoided, as presently attempted, by, under a testamentary direction, treating dividends which would otherwise be considered income, as principal, if, as here, the result of that course is to im*191pinge on the act against accumulations. This being the case, despite testator’s direction that all stock dividends shall be considered as principal, those here involved remain income; and, since this income is in effect ordered to be unlawfully accumulated, it becomes presently distributable. The law was correctly so held, under somewhat similar circumstances, in Wentz’s Est., 12 Pa. D. & C. 398, which seems to be the only reported Pennsylvania ruling directly approaching the precise point now before us.” (Emphasis supplied).
In reaching our conclusion in this matter Maris need not be overruled because since the decision in Maris the law has been changed by a legislative definition as principal of “all dividends” 9 The legislative change in the definition of “principal” renders Maris presently inapposite.
Prior to the period wherein the instant small dividends were received the legislature had seen fit to classify such dividends, whether received in a pre-1947 or post-1947 trust, as “principal” and not “income”. The power and authority of the legislature to change the definition of dividends from “income” to “principal” is beyond question. See: McEldowney, supra, Norvel, supra, Reznor, supra, and Arrott, supra. In Norvell, supra, Mr. Justice Roberts, speaking for this Court, said (pp. 433, 434, 435) : “We are therefore led to the question whether the Legislature possesses eon*192stitutional authority to define income. This determination, in turn, depends on whether income, as used in the statute, enjoys such a fixed definitional status that it may not be legislatively disturbed. In Cather-wood we attributed to trust income no such undisturbable status.
“We have no hesitancy in concluding that the Legislature has the power to define income.10 In the light of the complexity of current corporate finance, the definition of income is a function which the Legislature is well suited to perform. ‘In the area of apportionment of stock distribution between income and corpus beneficiaries, the elements of fairness, practicality and changing conditions dictate that freedom be given to lawmaking bodies to promulgate rules applicable to existing trusts, [citing authority]. . . .’ ”
Acting within the scope of its power and authority, the legislature designated small stock dividends as “principal”, not “income”, and, in so doing, it changed the so-called Pennsylvania Rule of Apportionment which was in effect when Maris was decided and upon which the Maris ruling was bottomed. It requires no citation of authority to establish that the Act Against Accumulations, supra, does not strike down accumulations of “principal” and these small stock dividends, by legislative fiat, deemed “principal at the time they were received”, could not be struck down by the Act Against Accumulations, supra.
Under Catherwood and Pew, stock dividends, up to and including six per cent, were considered not ap*193portionable and were treated as income until the time of passage of the Principal and Income Acts of 1945 and 1947, mandating that all dividends be deemed to be “principal”, which completely changed the status and character of such dividends. The eminent Professor Austin W. Scott well states: “The Pennsylvania legislature was not satisfied with the decision in Maris’s Estate. By the Act of May 25, 1939, P. L. 201, it is provided that in trusts becoming effective thereafter provisions directing that extraordinary dividends in stock or cash should be treated, in whole or in part, either as principal or income, should be valid and enforceable. Thereafter the Estates Act of 1947, §6, was amended to provide that a direction or authorization to apply to principal in whole or in part extraordinary dividends should be valid. The doctrine of the Maris case was repudiated by the legislature, at least as to trusts thereafter created.
“It would seem clear that to reaffirm and apply to small stock dividends the doctrine of Maris’s Estate would be out of keeping with the public policy of today, both in Pennsylvania and in other states. The whole situation is much changed since the decision of that case. The beneficiaries of a trust have no vested interest in the old rules of law. It would be unwise to make the legality of a direction by the settlor to allocate to principal what would otherwise be presumed to be income depend upon the time of the creation of the trusts, whether before 1939, before 1945 or 1947, before 1956, before 1963, or thereafter. Any such distinction as to the time of creating the trust would involve much trouble for future decisions.”11
The basic error in the ruling of the court below lies in its refusal to recognize and heed the legislative *194direction tliat, during the period in which the instant dividends were received, such dividends were deemed “principal” and not “income”. The court below held, in effect, that, no matter what the legislature may direct such small dividends to be deemed, whether principal or income, and no matter when such dividends were received, such small stock dividends must always be considered “income”. Such a position denies the right of the legislature to define that which is “income” and that which is “principal”, a denial in direct conflict with the decisions of our Court in McEldowney, Norvell and Arrott.
We disagree with the interpretation placed by the court below on Pew that all small stock dividends, regardless of when received and regardless of what the legislature has declared such small stock dividends to be deemed during the period of receipt of such dividends, must be classed as income. Pew does not stand for this proposition.
In Pew, Chief Justice Bell stated: “To summarize: We hold (1) that as to wills of persons dying before and inter vivos trusts created prior to the effective date of the Principal and Income Act of 1945, a gift of income or net income included small stock dividends of 6% or less, unless the testator or settlor clearly expressed a contrary intent; and (2) it is especially clear that in the light of the facts and circumstances which surrounded Mrs. Pew at the time she created the trust, she gave and intended to give to her grandson Arthur E. Pew, Jr., the life tenant of this trust, the small stock dividends which were paid annually, or as often as possible, to the owners of the common stock of the Sun Oil Company.” (Emphasis supplied) (411 Pa. at 109-110).
Time and again, this Court has stated that, unless in violation of public policy or the law, the intent of a settlor must prevail. For the reasons stated above, *195the Act Against Accumulations, supra,—the only statute or expression of public policy which, it is urged, renders settlor’s expressed intent invalid—is without present application. Under Pew, in trusts created prior to the effective date of the Principal and Income Act of 1915, small stock dividends are to be considered as income unless the testator or settlor clearly expressed a contrary intent. In the case at bar, the settlor’s intent is clear and unequivocal that all stock dividends shall be deemed principal; such intent should prevail. Professor Austin W. Scott aptly states: “The properly expressed wishes of the settlor should be carried out unless they are clearly contrary to public policy. There is no policy today which would preclude him from directing that small as well as large stock dividends should be allocated to principal. Where the settlor has a . large or controlling interest in a corporation, it might be disastrous if the trustees were to lose control by compelling them to disregard the settlor’s expressed intention by distributing stock dividends to the income beneficiary. See Haas Trust, 37 D. & C. 2d 593. Moreover, the tax consequences of such a compulsory distribution might be most unfortunate.”12
The court below fell into error in two respects: first, in treating as “income” and within the orbit of the Act Against Accumulations, supra, those dividends which, at the time of their receipt, were clearly mandated by the legislature to be deemed “principal” and not “income”; second, in completely ignoring settlor’s unequivocally expressed intent that such dividends be considered as “principal”. Such errors led to a result contrary to the legislative intendment and the views of this Court set forth in Pew.13
*196The decree of the court below must be reversed. To do otherwise would repudiate the legislative direction that these stock dividends be deemed, at the time of their receipt, “principal” and not “income”, to extend the prohibition of the Act Against Accumulations, supra, to items which were deemed “principal” and not “income”, to nullify and conflict, in large measure, with that which this Court in recent years held in Gatherwood, supra, Norvell, supra, McEldowney, supra, Resnor, supra and Arrott, supra, and to reach a conclusion which would only result in creating chaos in an area of the law where such should be avoided.
Decree reversed. Costs on estate.
Mr. Justice Cohen took no part in the consideration or decision of this case.This provision of the trust agreement clearly expresses settlor’s intent that all stock dividends be treated as principal and not as income.
The son has since assigned portions of his remainder interest so that half of the remainder interest is now owned by Hallowell Foundation (5.85%), Swarthmore College (21.76%) and the balance by the son.
Act of April 18, 1853, P. L. 503, §9, 20 P.S. §301.2 (Historical Note). Later statutes on the same subject (Act of May 25, 1939, P. L. 201, 20 P.S. §301.6 (Historical Note) ; Estates Act of 1947, P. L. 100, §6, 20 P.S. 301.1 et seq.; Estates Act Amendment of 1956, P. L. 1073, 20 P.S. §301.6), being applicable only to “conveyances” which take place subsequent to the passage of the respective statutes, are not applicable to this 1935 trust.
If the life tenant’s estate is correct in its contention, death taxes in that estate would be increased by about $200,000.00.
Emphasis supplied.
The decree of the court below is based upon the Statute Against Accumulations, its interpretation of Pew, Maris Estate, 301 Pa. 20, 151 A. 577 (1930) and McIlkenny Estate, 15 Fid. Rep. 367 (1965).
Act of July 31, 1947, P. R. 1283, §5, 20 P.S. §3470.5.
The Act of August 1, 1963, P. R. 442, 20 P.S. 3470.5, which amended the 1947 Principal and Ineome Act to provide that stock dividends of six per cent or less received thereafter be deemed income, concededly is inapplicable in the case at bar.
In Equitable Trust Co. v. Prentice, 250 N.Y. 1, 164 N.E. 723 (1928) substantially the same issue presented in Maris was presented to the New York Court of Appeals, a Court which up to that time and for sometime thereafter followed the so-called Pennsylvania Rule of Apportionment. Chief Judge (later Mr. Justice) Cardozo, speaking for a unanimous Court, held the discretion given to a trustee to allocate stock dividends to capital should prevail and that an allocation to capital under such circumstances was not an unlawful accumulation. See also: Matter of Heinrich, 90 N.Y.S. 2d 875 (1949) and Matter of Talbot, 9 N.Y.S. 2d 805 (1939).
It is common experience that “income” is a term which is, and always has been defined differently for various purposes by governmental agencies, regulatory bodies, taxing authorities, legislators, accountants, securities analysts, bankers, financial writers, lawyers and laymen.
See: Brief of amicus curiae (Darlington Estate) pp. 10-12.
See Note 11.
McIlhenny Estate, 15 Fid. Rep. 367 (1965), which reached the same result as the minority would reach, was, in our view, *196erroneously determined. The Orphans’ Court of Allegheny County in Trust of W. L. Mellon (No. 1069 of 1965), and Darlington Trust, 115 Pitts. L.J. 71 (1966), which reached the same result we reach, was eminently sound in its view. In McIlhenny, Judge Bolgek wrote a strong dissenting opinion.