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cost thereof and allowed expenses, 50 per centum of the amount of such excess. On every such transfer there shall be made and delivered by the transferor to the transferee a memorandum to which there shall be affixed lawful stamps in value equal to the tax thereon. Every such memorandum shall show the date thereof, the names and addresses of the transferor and transferee, the interest in silver bullion to which it refers, the price for which such interest is or is to be transferred and the cost thereof and the allowed expenses. Stamps affixed under this section shall be canceled (in lieu of the manner provided in section 1816) by such officers and in such manner as regulations under this section shall prescribe. Such officers shall cancel such stamps only if it appears that the proper tax is being paid, and, when stamps with respect to any transfer are so canceled, the transferor and not the transferee shall be liable for any additional tax found due or penalty with respect to such transfer. The Commissioner shall abate or refund, in accordance with regulations issued hereunder, such portion of any tax hereunder as he finds to be attributable to profits (1) realized in the course of the transferor's regular business of furnishing silver bullion for industrial, professional, or artistic use and (a) not resulting from a change in the market price of silver bullion, or (b) offset by contemporaneous losses incurred in transactions in interests in silver bullion determined, in accordance with such regulations, to have been specifically related hedging transactions; or (2) offset by contemporaneous losses attributable to changes in the market price of silver bullion and incurred in transactions in silver foreign exchange determined, in accordance with such regulations, to have been hedged specifically by the interest in silver bullion transferred. The provisions of this section shall extend to all transfers in the United States of any interest in silver bullion, and to all such transfers outside the United States if either party thereto is a resident of the United States or is a citizen of the United States who has been a resident thereof within three months before the date of the transfer or if such silver bullion or interest therein is situated in the United States; and shall extend to transfers to the United States Government (the tax in such cases to be payable by the transferor), but shall not extend to transfers of silver bullion by deposit or delivery at a United States mint under proclamation by the President or in compliance with any Executive order issued pursuant to section 7 of the Silver Purchase Act of 1934, 48 Stat. 1179 (U. S. C., Title 31, $316a).

As used in this section

The term "cost" means the cost of the interest in silver bullion to the transferor, except that (a) in case of silver bullion produced from materials containing silver which has not previously entered into industrial, commercial, or monetary use, the cost to a transferor who is the producer shall be deemed to be the market price at the time of production determined in accordance with regulations issued hereunder; (b) in the case of an interest in silver bullion acquired by the transferor otherwise than for valuable consideration, the cost shall be deemed to be the cost thereof to the last previous transferor by whom it was acquired for a valuable consideration; and (c) in the case of any interest in silver bullion acquired by the transferor in a

wash sale, the cost shall be deemed to be the cost to him of the interest transferred by him in such wash sale, but with proper adjustment, in accordance with regulations under this section, when such interests are in silver bullion for delivery at different times.

The term "transfer" means a sale, agreement of sale, agreement to sell, memorandum of sale or delivery of, or transfer, whether made by assignment in blank or by any delivery, or by any paper or agreement or memorandum or any other evidence of transfer or sale; or means to make a transfer as so defined.

The term "interest in silver bullion" means any title or claim to, or interest in, any silver bullion or contract therefor.

The term "allowed expenses" means usual and necessary expenses actually incurred in holding, processing, or transporting the interest in silver bullion as to which an interest is transferred (including storage, insurance, and transportation charges but not including interest, taxes, or charges in the nature of overhead), determined in accordance with regulations issued hereunder.

The term "memorandum" means a bill, memorandum, agreement, or other evidence of a transfer.

The term "wash sale" means a transaction involving the transfer of an interest in silver bullion and, within 30 days before or after such transfer, the acquisition by the same person of an interest in silver bullion. Only so much of the interest so acquired as does not exceed the interest so transferred, and only so much of the interest so transferred as does not exceed the interest so acquired, shall be deemed to be included in the wash sale.

The term "silver bullion" means silver which has been melted, smelted, or refined and is in such state or condition that its value depends primarily upon the silver content and not upon its form. The term "person" means an individual, partnership, association, or corporation.

The Secretary is authorized to issue, with the approval of the President, such rules and regulations as the Secretary may deem necessary or proper to carry out the purposes of this section.

[For exemption of deliveries of silver to a United States mint, see section 4 (b) of the act of July 6, 1939 (53 Stat. 998; 31 U. S. C. 316c).]

SEC. 1807. PLAYING CARDS.

(a) GENERAL RULE.-Upon every pack of playing cards containing not more than 54 cards, manufactured or imported, and sold, or removed for consumption or sale, a tax of 13 cents per pack. This tax shall be in addition to any import duties imposed on such articles of foreign manufacture.

SEC. 1808. EXEMPTIONS.

There shall not be taxed under this chapter

(a) GOVERNMENT AND STATE OBLIGATIONS.-Any bond, note, or other instrument, issued by the United States, or by any foreign Government, or by any State, Territory, or the District of Columbia, or local subdivision thereof, or municipal or other corporation exercising the taxing power; or

(b) BONDS OF INDEMNITY.-Any bond of indemnity required to be filed by any person to secure payment of any pension, allowance,

allotment, relief, or insurance by the United States, or to secure a duplicate for, or the payment of, any bond, note, certificate of indebtedness, war-savings certificate, warrant or check, issued by the United States; or

(c) STOCKS AND BONDS OF DOMESTIC BUILDING AND LOAN ASSOCIATIONS AND MUTUAL DITCH OR IRRIGATION COMPANIES.-Stocks and bonds issued by domestic building and loan associations, savings and loan associations, cooperative banks, and homestead associations substantially all the business of which is confined to making loans to members, or by mutual ditch or irrigation companies; or

(d) STOCKS AND BONDS OF FARMERS', FRUIT GROWERS', OR COOPERATIVE ASSOCIATIONS.-Stocks and bonds and other certificates of indebtedness issued by any farmers' or fruit growers' or like associations organized and operated on a cooperative basis for the purposes, and subject to the conditions, prescribed in paragraph (12) of sec

tion 101.

[For paragraph (12) of section 101, see the note following section 1426(b).]

(e) CORPORATE REORGANIZATIONS AND REORGANIZATION OF RAILROADS. The provisions of sections 1801, 1802, and 1821 (b) of this chapter and the provisions of sections 3481 and 3482 of chapter 31 shall not apply to the issuance, transfer or exchange of securities, or the making, delivery or filing of conveyances to make effective any plan of reorganization or adjustment-

(1) confirmed under the act entitled "An Act to establish a uniform system of bankruptcy throughout the United States," approved July 1, 1898, as amended [U. S. C., Title 11],

(2) approved in an equity receivership proceeding in a court involving a railroad corporation, as defined in section 77 (m) of such act [11 U. S. C. 205], or

(3) approved in an equity receivership proceeding in a court involving a corporation, as defined in section 106 (3) of such act [11 U. S. C. 506],

if the issuance, transfer, or exchange of securities, or the making, delivery or filing of instruments of transfer or conveyances, occurs within five years from the date of such confirmation or approval.

[For inapplicability of sections 1801, 1802, 3481, and 3482 to the issuance, transfer, or exchange of securities of carriers or the making or delivery of conveyances under section 20b of the Interstate Commerce Act, see paragraph (12) of that section (62 Stat. 167; 80th Cong., Pub. Law 478).]

(f) ORDERS OF THE SECURITIES AND EXCHANGE COMMISSION.-The provisions of sections 1801, 1802, and 1821 (b) of this chapter and the provisions of sections 3481 and 3482 of chapter 31 shall not apply to the issuance, transfer, or exchange of securities, or making or delivery of conveyances, to make effective any order of the Securities and Exchange Commission as defined in section 373 (a) of chapter 1: Provided, That (1) the order of the Securities and Exchange Commission in obedience to which such issuance, transfer, or exchange of securities, or conveyances are made recites that such issuance, transfer, or exchange, or conveyances are necessary or appropriate to effectuate

1 The statute reads "section".

the provisions of section 11 (b) of the Public Utility Holding Company Act of 1935, 49 Stat. 820 (U. S. C., Title 15, sec. 79k (b)), (2) such order specifics and itemizes the securities and other property which are ordered to be issued, transferred, exchanged, or conveyed, and (3) such issuance, transfer, or exchange, or conveyance is made in obedience to such order.

[Under section 373 (a), the term "order of the Securities and Exchange Commission" is defined as "an order issued after May 28, 1938, by the Securities and Exchange Commission which requires, authorizes, permits, or approves transactions described in such order to effectuate the provisions of section 11 (b) of the Public Utility Holding Company Act of 1935, 49 Stat. 820 (U. S. C., Title 15, sec. 79k (b)), which has become or becomes final in accordance with law.]

(g) COMMON TRUST FUNDS.-The provisions of section 1802 (a) shall not apply to the issue of shares or certificates of a common trust fund, as defined in section 169.

[Under section 169 a common trust fund is defined as "a fund maintained by a bank (as defined in section 104)—

"(1) exclusively for the collective investment and reinvestment of moneys contributed thereto by the bank in its capacity as a trustee, executor, administrator, or guardian; and

"(2) in conformity with the rules and regulations, prevailing from time to time, of the Board of Governors of the Federal Reserve System pertaining to the collective investment of trust funds by national banks."] (h) CROSS REFERENCE.

For exemption in case of playing cards exported to a foreign country, see section 1830.

[For taxes in connection with property or interests transferred to or vested in the Alien Property Custodian, see section 36 of the Trading with the Enemy Act, as added by the act of August 8, 1946 (c. 878, 60 Stat. 929; 50 U. S. C. App. 36).]

SEC. 1809. PAYMENT OF TAX.

(a) BY WHOM PAID. The tax imposed by this chapter shall be paid by any person who makes, signs, issues, sells, removes, consigns, or ships any of the documents, instruments, matters, and things mentioned and described in sections 1801 to 1807, inclusive, or for whose use or benefit the same are made, signed, issued, sold, removed, consigned, or shipped. The United States or any agency or instrumentality thereof shall not be liable for the tax with respect to an instrument to which it is a party, and affixing of stamps thereby shall not be deemed payment for the tax, which may be collected by assessment from any other party liable therefor.

(b) METHOD OF PAYMENT.—

(1) STAMPS.-The Commissioner shall cause to be prepared and distributed for the payment of the taxes prescribed in this chapter suitable stamps denoting the tax on the documents, articles, or things to which the same may be affixed.

(2) ASSESSMENT.-All internal revenue laws relating to the assessment and collection of taxes shall be extended to and made a part of this chapter, so far as applicable, for the purpose of collecting stamp taxes omitted through mistake or fraud from any instrument, document, paper, writing, parcel, package, or article named herein.

(3) CROSS REFERENCE.

For general provisions relating to assessment and collection, see part II of subchapter A of chapter 28 [sections 3310 and following], and chapters 34, 35, and 36 [sections 3600 and following].

SEC. 1815. AFFIXING.

SUBCHAPTER B-STAMPS

The Commissioner shall prescribe such method for the affixing of the stamps prescribed in section 1809 (b) (1) in substitution for, or in addition to the method provided in this chapter, as he may deem expedient.

SEC. 1816. CANCELLATION.

(a) GENERAL RULE.-Whenever an adhesive stamp is used for denoting any tax imposed by this chapter, except as hereinafter provided, the person using or affixing the same shall write or stamp or cause to be written or stamped thereupon the initials of his or its name and the date upon which the same is attached or used, so that the same may not again be used: Provided, That the Commissioner may prescribe such other method for the cancellation of such stamps. as he may deem expedient.

(b) CROSS REFERENCE.

For method of canceling stamps in the case of silver sales and trans fers, see section 1805.

SEC. 1817. SUPPLY.

(a) POST OFFICE.-The Commissioner shall furnish to the Postmaster General without prepayment a suitable quantity of adhesive stamps to be distributed to and kept on sale by the various postmasters in the United States in all post offices of the first and second classes and such post offices of the third and fourth classes as are located in county seats. The Postmaster General may require each such postmaster to give additional or increased bond as postmaster for the value of the stamps so furnished, and each such postmaster shall deposit the receipts from the sale of such stamps to the credit of and render accounts to the Postmaster General at such times and in such form as he may by regulations prescribe. The Postmaster General shall at least once monthly transfer all collections from this source to the Treasury as internal revenue collections.

(b) DESIGNATED DEPOSITARY OF THE UNITED STATES.-Each collector shall furnish, without prepayment, to any designated depositary of the United States, located in the district of such collector, a suitable quantity of adhesive stamps to be kept on sale by such designated depositary.

(c) STATE AGENTS.-Each collector shall furnish, without prepayment, to any person who is (1) located in the district of such collector, (2) duly appointed and acting as agent of any State for the sale of stock transfer stamps of such State, and (3) designated by the Commissioner for the purpose, a suitable quantity of such adhesive stamps as are required by section 1802 to be kept on sale by such person.

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