WOE UNTO YOU, LAWYERS!

There is, moreover, another catch, and it was referred to a couple of chapters
back. Even when the words of a statute appear, at least to a no-lawyer, to have a
perfectly plain and definite meaning, you can never be sure that a court will not up
and say that those words mean something entirely different. The Supreme Court is
no exception. There was the time it said that Section 20 of the Clayton Act meant,
literally, nothing at all. There was the time the Court ruled that the clause of the
Guffey Coal Act, directing that if part of the Act be declared unconstitutional the rest
of the Act should go into effect anyway, meant the exact opposite of what that clause
said. And there have been countless other examples of meaning-mangling when the
Court has undertaken to “interpret” the statutes of the United States.
For instance, when Congress first passed an estate tax, taxing the transfer of
money or other property at death, rich men rushed to their lawyers to find out how
they could get around the tax without giving away their wealth before they died. The
commonest and, by and large, the most effective dodge suggested and used was for
the rich man to put his property in trust – which of course only meant giving the
property to someone else to keep for him by the use of the proper legal rigmarole –
and still to keep several strings on the property himself. He might keep the right to
take the property back any time he wanted it. He might give up this right but insist
on getting the income from the property, which was usually stocks and bonds, as
long as he lived. He might keep the right to direct the management of the property,
or to say who should get it at his death. At any rate, the idea was that since he no
longer “owned” the property legally, (legally the trustee “owned” it for him) he
couldn’t be taxed for giving it to his wife or his children at his death, even though
that might be exactly what he had ordered the trustee to do.
But Congress, foreseeing some such subterfuge from the start, had written
into the estate tax law, in legal but comparatively comprehensible language, a
special provision. The provision was that any transfer of property, even though not
done in the usual way of making a will, which was “intended to take effect in
possession or enjoyment at death” should be soaked under the estate tax. And very
soon the question arose – and was carried up to the Supreme Court – whether an
estate tax had to be paid on property that a man had put in trust, ordering the trustee
to pay him the income as long as he lived and then to turn over the property to his son
at his death.
Certainly this would seem to be one of the exact situations that Congress had
been talking about. The man kept right on enjoying his interest and his dividends
until he died. The son was not even privileged to smell the stocks and bonds until, at
his father’s death, they were turned over to him. From his standpoint it was the, and
not until then, that his “possession and enjoyment” of the property “took effect.”
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