The taxpayer, which was a securites dealer, ceased in 1938 to comply with requirements of the investment dealers' association of which it was a member as a result of bank advances to it being too high relative to the value of securities held by it. It accordingly transferred its physical equipment, records and goodwill to a new company in consideration for shares, and itself ceased to be a member of the investment dealers' association, but retained the securities and the bank debts, and traded those securities and other securities between 1938 and the end of the Second World War, with 124 purchaes and 200 sales occuring. In finding that the taxpayer's gains were on income account, Rand J. stated (p. 1016):
[S]o far as the company's business included the disposal of securities held on April 30th, 1938, with resulting purchases, it was by way of completing the business admittedly carried on by the Comapnay as dealer before 1938... .
Investments, in the sense urged, look primarily to the maintenance of an annual return in dividends or interest. Substitutions in the securities take place, but they are designed to further that primary purpose and are subsidiary to it. On the facts before us, there cannot, in my opinion, be any real doubt that there was no such dominant purpose here.
Respecting a submission that a purchase of the shares of a particular corporation was effected in 1944 in order to obtain effective control of that corporation, thereby permitting the principal of the taxpayer to introduce his sons to industrial management, Rand J stated (p. 1016) that a business could include:
...a business of taking over, by means of stock control, run down industries, building them up, and disposing of them.