Opinion of the Court. 320 U.S. his property, since execution against the body was not at any time in legislative contemplation. There could be no practical exoneration of the owner that did not at the same time exempt his property. If the owner by statute is told that he need not "make good" to the shipper, how may we say that he shall give up his ship for that very purpose? It seems to us that Congress has, with the exception stated in the Act, extinguished fire claims as an incident of contracts of carriage, and that no fiction as to separate personality of the ship may revive them. There may, of course, be a waiver of the benefits of the Fire Statute, but none is present in this case. Claimants urge that the statute as construed goes beyond any other exemption from liability for negligence allowed to a common carrier, and that it should therefore be curtailed by strict construction. We think, however, that claimants' contention would result in a frustration of the purpose of the Act. At common law the shipowner was liable as an insurer for fire damage to cargo." We may be sure that this legal policy of annexing an insurer's liability to the contract of carriage loaded the transportation rates of prudent carriers to compensate the risk. Long before Congress did so, England had separated the insurance liability from the carrier's duty.12 To enable our merchant marine to compete, Congress enacted this statute. It was a sharp de 13 11 New Jersey Steam Navigation Co. v. Merchants' Bank, 6 How. 344, 381. The Act of March 3, 1851, followed soon after and probably was enacted in consequence of this decision. See The Great Western, 118 U. S. 520, 533. 12 This Court has heretofore pointed out that the Act of March 3, 1851 was patterned on English statutes, including Act of 7 George II, c. 15, passed in 1734, and 26 George III, c. 86 (1786). See Norwich Co. v. Wright, 13 Wall. 104, 117 et seq.; The Main v. Williams, 152 U. S. 122, 124. 13 Senator Hamlin reported the bill from the Committee on Commerce on January 25, 1851 and said, "This bill is predicated on what 249 Opinion of the Court. parture from the concepts that had usually governed the common carrier relation, but it is not to be judged as if applied to land carriage, where shipments are relatively multitudinous and small and where it might well work injustice and hardship. The change on sea transport seems less drastic in economic effects than in terms of doctrine. It enabled the carrier to compete by offering a carriage rate that paid for carriage only, without loading it for fire liability. The shipper was free to carry his own fire risk, but if he did not care to do so it was well known that those who made a business of risk-taking would issue him a separate contract of fire insurance. Congress had simply severed the insurance features from the carriage features of sea transport and left the shipper to buy each separately. While it does not often come to the surface of the record in admiralty proceedings, we are not unaware that in commercial practice the shipper who buys carriage from the shipowner usually buys fire protection from an insurance company, thus obtaining in two contracts what once might have been embodied in one. The purpose of the statute to relieve carriage rates of the insurance burden would be largely defeated if we were to adopt an interpretation which would enable cargo claimants and is now the English law, and it is deemed advisable by the Committee on Commerce that the American marine should stand at home and abroad as well as the English marine." 23 Cong. Globe 332. On February 26, 1851, speaking to the bill, Senator Hamlin said: "These are the provisions of the bill. It is true that the changes are most radical from the common law upon the subject; but they are rendered necessary, first, from the fact that the English common law system really never had an application to this country, and, second, that the English Government has changed the law, which is a very strong and established reason why we should place our commercial marine upon an equal footing with hers. Why not give to those who navigate the ocean as many inducements to do so as England has done? Why not place them upon that great theatre where we are to have the great contest for the supremacy of the commerce of the world? That is what this bill seeks to do, and it asks no more." 23 Cong. Globe 715. 552826-44-21 their subrogees to shift to the ship the risk of which Congress relieved the owner. This would restore the insurance burden at least in large part to the cost of carriage and hamper the competitive opportunity it was purposed to foster by putting our law on an equal basis with that of England. Our conclusion is that any maritime liens for claimants' cargo damage are extinguished by the Fire Statute. In so far as the decision in The Etna Maru conflicts, it is disapproved, and the judgment of the court below is Affirmed. MERCHANTS NATIONAL BANK OF BOSTON, EXECUTOR, v. COMMISSIONER OF INTERNAL REVENUE. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIRST CIRCUIT. No. 30. Argued October 19, 1943.-Decided November 15, 1943. 1. Section 303 (a) (3) of the Revenue Act of 1926, which allows deduction for estate tax purposes of amounts bequeathed to or for the use of charities, was validly implemented by Treasury Regulations 80 (1934 ed.), Arts. 44 and 47, which provide that, where a trust is created for both charitable and private purposes, the charitable bequest, to be deductible, must have at the testator's death a value "presently ascertainable, and hence severable from the interest in favor of the private use," and further, to the extent that there is a power in a private donee or trustee to divert the property from the charity, "deduction will be limited to that portion, if any, of the property or fund which is exempt from an exercise of such power." P. 260. 2. Under a trust created by will, the income was to be paid to the testator's widow for life, and on her death all but a specified amount of the principal was to go to designated charities. The trustee was authorized, in his discretion, to invade the corpus for the "comfort, support, maintenance, and/or happiness" of the widow, and was directed to exercise that discretion with liberality towards the widow and to consider her "welfare, comfort and happiness prior to claims of residuary beneficiaries," i. e., the charities. In 1937 the trust realized gains from the sale of securities. Held: (1) A deduction under § 303 (a) (3) of the Revenue Act of 1926, for purposes of the federal estate tax, was properly disallowed. P. 261. (2) A deduction for federal income tax purposes, under § 162 (a) of the Revenue Act of 1936, which permits a deduction of that part of gross income "which pursuant to the terms of the will is during the taxable year . . . permanently set aside" for charitable purposes, was properly disallowed. P. 263. 132 F.2d 483, affirmed. CERTIORARI, 319 U. S. 734, to review the reversal of a decision of the Board of Tax Appeals, 45 B. T. A. 270, which set aside a determination of deficiencies in income and estate taxes. Mr. Edward C. Thayer for petitioner. Mr. Arnold Raum, with whom Solicitor General Fahy, Assistant Attorney General Samuel O. Clark, Jr., Messrs. Sewall Key and Morton K. Rothschild and Miss Helen R. Carloss were on the brief, for respondent. MR. JUSTICE RUTLEDGE delivered the opinion of the Court. Ozro M. Field died in Massachusetts in 1936, leaving a gross estate of some $366,000. In his will he provided, after certain minor bequests, that the residue of his estate be held in trust, the income to go to his wife for life, and on her death all but $100,000 of the principal1 to go "free and discharged of this trust" to certain named charities. Under the trust set up by the will, the trustee, petitioner here, was authorized to invade the corpus "at such time or times as my said Trustee shall in its sole discretion deem 1 The $100,000 was to remain in trust, the income to go in equal shares to his three adopted children and a niece of his wife, and on the death of the last of these beneficiaries the corpus was also to go to the named charities. wise and proper for the comfort, support, maintenance, and/or happiness of my said wife, and it is my wish and will that in the exercise of its discretion with reference to such payments from the principal of the trust fund to my said wife, May L. Field, my said Trustee shall exercise its discretion with liberality to my said wife, and consider her welfare, comfort and happiness prior to claims of residuary beneficiaries under this trust." In 1937 the trust realized gains of $100,900.31 from the sale of securities in its portfolio. In filing estate and income tax returns petitioner, which was also Mr. Field's executor, sought to deduct $128,276.94 from the gross estate and the $100,900.31 from the 1937 income of the trust, on the theory that those sums constituted portions of a donation to charity and were therefore deductible respectively under § 303 (a) (3) of the Revenue Act of 1926 (44 Stat. 72)2 and § 162 (a) of the Revenue Act of 1936 (49 Stat. 1706).3 2 Section 303 provides: "For the purpose of the tax the value of the net estate shall be determined- "(a) In the case of a resident, by deducting from the value of the gross estate "(3) The amount of all bequests, legacies, devises, or transfers, to or for the use of the United States, any State, Territory, any political subdivision thereof, or the District of Columbia, for exclusively public purposes, or to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, . . ." 3 Section 162 provides: "The net income of the estate or trust shall be computed in the same manner and on the same basis as in the case of an individual, except that "(a) There shall be allowed as a deduction (in lieu of the deduction for charitable, etc., contributions authorized by section 23 (o)) any part of the gross income, without limitation, which pursuant to the terms of the will or deed creating the trust, is during the taxable year |