United States v. Cannelton Sewer Pipe Company/Concurrence Harlan

Mr. Justice HARLAN, concurring in the result.

In joining the judgment in this case I shall refer only to one matter which, among the voluminous data presented by the parties, is for me by far the most telling in favor of the Government's position.

Treasury Regulation 77, promulgated in 1933 under the Revenue Act of 1932 (47 Stat. 169), defined the basic term 'gross income from the property' contained in § 114(b)(4) of the 1932 Act and carried forward in its successors. Art. 221(g). It concededly supports, by its express terms (see 364 U.S. at page 83, 80 S.Ct. at page 1585), the position of the Government in the present case. In my opinion the regulation was undoubtedly a valid exercise of the Commissioner's power to construe a generally worded statute. See Preliminary Report on Depletion, Staff Reports to the Joint Committee on Internal Revenue Taxation (1930), p. 68 (Shepherd Report); Helvering v. Wilshire Oil Co., 308 U.S. 90, 102-103, 60 S.Ct. 18, 25, 84 L.Ed. 101. The Revenue Act of 1943 (58 Stat. 21, 45), which added to the 1939 Code the provisions governing this case, represented only a limited departure from the 1933 Regulation, or from the administrative action taken under it, principally in the area of extractive processes applied to minerals not customarily sold in the form of a crude product, and did not basically affect the meaning of the term 'gross income from the property.' See, e.g., Revenue Act of 1943, Hearings before the Senate Committee on Finance, 78th Cong., 1st Sess., on H.R. 3687, pp. 527-529; S.Rep. No. 627, 78th Cong., 1st Sess., pp. 23-24; Revenue Revision of 1942, Hearings before the House Committee on Ways and Means, 77th Cong., 2d Sess., p. 1202; compare id., at 1199; Silver, Hearings before the Senate Special Committee on the Investigation of Silver, 77th Cong., 2d Sess., pursuant to S.Res. 187 (74th Cong.), pp. 761-764. Respondent's efforts to impugn the force of that Regulation, see Shepherd Report, supra, at 70, 71; Revenue Revisions, 1947-1948, Hearings before the House Committee on Ways and Means, 80th Cong., 1st Sess., p. 3283; Mineral Treatment Processes for Percentage Depletion Purposes, Hearings before the House Committee on Ways and Means, 86th Cong., 1st Sess., pp. 258, 264, seem to me quite unpersuasive.

This history, in my view, provides an authoritative and controlling gloss upon the term 'commercially marketable mineral product or products' in the statutory definition of 'mining,' which in turn constitutes the 'property' with which the statute deals. See Helvering v. Wilshire Oil Co., supra. It results, on this record, in limiting respondent's basis for depletion to its constructive income from raw fire clay and shale.