10 T.C. 1225">*1225 In this case the respondent has determined an estate tax deficiency of $ 1,254,568.56. The petitioner alleges that1948 U.S. Tax Ct. LEXIS 140">*141 the estate tax has been overpaid by $ 108,378.81 and asks relief accordingly. The principal 10 T.C. 1225">*1226 issue is whether the decedent was a resident of (domiciled in) the United States at the date of death. If this Court holds that the decedent was a resident, and not a nonresident, then the value of decedent's Netherlands assets on the optional valuation date, December 23, 1940, must be determined. Other issues, relating to the value of certain foreign assets, were settled by stipulations filed at the hearing. Effect will be given thereto upon redetermination of the deficiency under Rule 50.

FINDINGS OF FACT.

Anthony H. G. Fokker died in New York, New York, on December 23, 1939. Letters testamentary were issued to Carter Tiffany under the will of the decedent by the Surrogate's Court of Rockland County, New York, on June 3, 1940. Tiffany duly qualified, and is acting, as executor.

The estate tax return on behalf of the decedent's estate was filed with the collector of internal revenue for the second district of New York on March 22, 1941. Therein petitioner elected, in accordance with section 811 (j) of the Internal Revenue Code, to have the property in the gross estate valued1948 U.S. Tax Ct. LEXIS 140">*142 as of one year after the date of the decedent's death, namely, December 23, 1940. The deficiency notice dated April 23, 1942, shows that decedent's estate tax return reported a net estate for basic and additional taxes of $ 1,339,099.96, and claimed no deductions. After making adjustments, respondent determined a gross estate of $ 5,131,164.18 for basic tax, deductions of $ 840,203.08, total gross taxes of $ 1,583,080.55, and a deficiency of $ 1,254,568.56. The deficiency is subject to a tentative credit of $ 2,942.06 for state estate, inheritance, and succession taxes.

Anthony H. G. Fokker was born of Dutch parents on April 6, 1890, in Kediri, Java, Dutch East Indies. He died a subject of the Kingdom of The Netherlands. At no time during his life did he become a citizen of the United States.

In or about 1896 the Fokker family returned to Holland, where the children attended school. The decedent had a natural aptitude for things mechanical, but in other respects he found school very boring. In or about 1908 he went to Germany to attend an automotive engineering school, but enrolled instead in an aviation course. Prior thereto he had experimented with model airplanes and developed1948 U.S. Tax Ct. LEXIS 140">*143 certain theories as to the lack of stability of the early models. Fokker spent the next ten or eleven years in Germany building, experimenting, testing, and flying planes that he had designed.

Just before Christmas in 1910 the decedent made his first flight. He flew in a plane that he had designed and built. In May 1911 he qualified for a German pilot's license. During 1911, 1912, and 1913 10 T.C. 1225">*1227 he spent most of his time giving exhibition flights, barnstorming about Germany, improving his plane, and designing new planes, directed primarily toward the raising of funds and the manufacture and sale of his planes in various European countries. Near the end of 1913 the decedent was awarded a contract by the German Army as a result of an open competition between airplane manufacturers. By the summer of 1914 Fokker was operating profitably in a factory at Schwerin, Germany.

The outbreak of World War I gave Fokker, then 24 years of age, unlimited opportunities to design and manufacture airplanes. Initially used for observation purposes, the airplane soon developed into a combat weapon, particularly after Fokker invented the first synchronized machine gun to fire between whirling1948 U.S. Tax Ct. LEXIS 140">*144 propellor blades. As the demands of the war increased, Fokker designed new and improved types of military planes and synchronized machine guns. The German Army and Navy took every plane he could produce, even with constantly expanding facilities and increasing prices. By the end of the war, Fokker was world-famous and had acquired a fortune which exceeded 30,000,000 marks, according to his own estimate.

In or about 1919 Fokker returned to Holland. He smuggled out of Germany into Holland about one-fourth of his fortune in the form of cash, airplanes, motors, and his plant equipment. With this capital he organized an aircraft company in Holland, known as Nederlandsche Vliegtuigenfabrick, N. V., hereinafter referred to as the Dutch company, which sold the surplus airplanes and motors smuggled out of Germany. The Dutch company also began to manufacture airplanes for commercial use, and Fokker soon found himself at the head of the third largest industry in Holland, employing 1,500 men and having sales for the first three years of $ 8,000,000.

At or about this period the United States Army purchased several of the latest type Fokker planes which had been developed in Holland. Over1948 U.S. Tax Ct. LEXIS 140">*145 a three-year period the Dutch company delivered $ 750,000 worth of planes to the United States Army and Navy, which suggested that Fokker establish an American factory to overcome the objection of American manufacturers to the purchase of foreign planes. In or about 1922 Fokker came to the United States and organized the Atlantic Aircraft Corporation. The first domestic order of this corporation from the United States Army called for the adaptation of the Fokker steel fuselage to 100 DeHaviland airplanes. This order introduced the Fokker steel fuselage in America. In 1925 Fokker brought over the first tri-motored plane. By 1929 Fokker planes were being used in 30 different countries; 35 different airway companies had adopted them as standard flying equipment; 18 factories in 14 different countries were building them under license 10 T.C. 1225">*1228 agreements; and numerous planes were used by private owners for pleasure and business purposes. By 1929 the Atlantic Aircraft Corporation had become the Fokker Aircraft Corporation of America and was operating several factories in the United States.

The decedent's first trip to America was in 1920. In each of the years 1922, 1923, 1924, 1948 U.S. Tax Ct. LEXIS 140">*146 and 1925 he made a trip to the United States. The dates of his arrivals in, and departures from, this country from 1926 to the date of his death were as follows:

All arrivals and departures were by ship through the Port of New York, except the arrival in 1937, which was from Canada, through Rouses Point, New York.

In 1925, 1926, and 1927 the decedent applied for life insurance from a number of American companies. Attached to one of the applications was a signed statement by Fokker, dated July 21, 1925, which reads as follows:

Due to my large interests in the United States I have decided to become a resident of the United States of America. It is also my intention to apply for citizenship papers.

On June 17, 1926, Fokker filed his declaration of intention to become a citizen of the United1948 U.S. Tax Ct. LEXIS 140">*147 States. The declaration stated that his residence was the Waldorf Astoria Hotel, New York, New York; that he was not married; and that his last foreign residence was Amsterdam, Netherlands.

Between June 17, 1926, and June 7, 1927, Fokker married a Canadian girl, who was his second wife. He rented a house, in which he and his wife were living on the latter date in Alpine-on-the-Hudson, New Jersey. Part of the furniture and furnishings, including oil paintings, statuary, bronzes, and other articles used in this house, was acquired by Fokker while living in Germany and was shipped from there to Holland and from Holland to his house in Alpine, New Jersey. With minor exceptions, the furniture and furnishings in the Alpine house remained in America during Fokker's lifetime and were 10 T.C. 1225">*1229 a part of his gross estate after his death. Fokker continued to rent this house until 1937.

In 1927 and 1928 Fokker filed a number of applications for patents with the United States Commissioner of Patents in which he described himself as a resident of New York or New Jersey.

In 1928, or early in 1929, Fokker planned the construction of a very large and very beautiful home on the Palisades, also1948 U.S. Tax Ct. LEXIS 140">*148 in Alpine, New Jersey. The plans for this home called for a very complicated set of foundations. The contract for the completion of the foundations was outstanding when Fokker abandoned the project.

Fokker's wife died suddenly in February 1929. Her death had a profound physical and emotional effect upon him. His wife was buried in Englewood, New Jersey.

In 1929 Fokker had an investment in Federal Aviation, a company engaged in financing and promoting aviation enterprises.

Early in 1929 Fokker sold a 40 per cent interest in his American company to General Motors for $ 8,000,000. The company was renamed General Aviation Co. and Fokker was made director of engineering. By combining his technical knowledge and experience with General Motors' power and prestige, Fokker hoped to build up a world-wide aviation enterprise. To further this aim he caused his Dutch company to give General Aviation an option to buy it, and General Aviation was also given the right to use his name. In or about September 1929 he brought Carter Tiffany into the General Aviation organization, but while Fokker was in Europe Tiffany was let out. Upon his return from Europe Fokker employed Tiffany personally1948 U.S. Tax Ct. LEXIS 140">*149 and they left for Europe, where Tiffany was acquainted with the operations of his Dutch company and European manufacturing and operations. Tiffany and Fokker returned to America in March of 1930.

In June 1929 Fokker opened his first account with Jas. H. Oliphant & Co., a New York brokerage firm, thereafter known as No. 40 account. In March 1930 Fokker opened his No. 101 account and his No. 42 account with said firm. In March 1934 he opened his No. 40 Liberty bond account, also with Jas. H. Oliphant & Co. In November 1935 he opened his No. 45 joint account with Oliphant & Co., in which Carter Tiffany had an interest. Fokker had other accounts with Oliphant & Co., but neither the trading therein nor the use thereof is disclosed.

During 1930 the friction between Fokker and the other officials in General Aviation increased. Fokker wanted the company to expand, and was accustomed to operating as an individual. The General Motors and General Aviation officials were accustomed to operating through committees and Fokker's personal activities in the name of 10 T.C. 1225">*1230 General Aviation without committee approval were resented by the committee members. The friction between Fokker and1948 U.S. Tax Ct. LEXIS 140">*150 the committee members was aggravated by the crash of a Fokker commercial plane in which Knute Rockne was killed and the subsequent grounding of all Fokker planes of this type until the cause of the crash was determined. In or about June 1931, Fokker broke with General Motors after unsuccessful appeals to Alfred P. Sloan, Jr., to remedy the situation. In the settlement that followed, Fokker severed all connection with General Aviation, the latter's option to buy the Dutch company was canceled, and General Aviation relinquished its right to use Fokker's name. Thereafter Fokker's airplane designing and manufacturing activities were confined to his Dutch company.

After his break with General Motors, Fokker spent more time in Europe than he did in America. Carter Tiffany, as his personal representative, handled most of Fokker's interests in America. Prior to July 1932, Fokker's security investments in this country were managed by one Cooper, but during July 1932 the management of these investments was turned over to Carter Tiffany. After Tiffany took over the management of Fokker's security investments, the office occupied jointly by Cooper and Fokker in the Chanin Building was given1948 U.S. Tax Ct. LEXIS 140">*151 up and Tiffany used a desk in the office of Jas. H. Oliphant & Co. at 61 Broadway. In 1931, and prior and subsequent thereto, Fokker employed a secretary, who went to his office at Teterboro, New Jersey, with General Aviation or to his home each day when Fokker was in America, and sometimes to his home and sometimes to Carter Tiffany for dictation when Fokker was away. In 1931 Fokker paid his secretary $ 35 per week; at the time of his death she received $ 60 per week.

After Carter Tiffany took over the management of his security investments in America, Fokker paid little attention to his accounts. Purchases and sales of securities were made by Tiffany in the various accounts in accordance with his judgment of market conditions. A summary of the purchases and sales in Fokker's accounts above mentioned, exclusive of his No. 40 Liberty bond account and his No. 42 account, which related to Fokker and General Aviation stocks, for the period 1929 to 1939, inclusive, is as follows:

1948 U.S. Tax Ct. LEXIS 140">*152 10 T.C. 1225">*1231 In June 1933 Fokker allowed his declaration of intention to become an American citizen to lapse. He was in Europe at the expiration date and did not return to this country until December 4, 1933. In a letter to Tiffany dated April 25, 1933, he stated, "In fact I would not go through with the naturalization if my final decision had to be taken before the 17th of June." Subsequent to December 4, 1933, he told Tiffany that he "didn't see any reason for becoming an American citizen."

Early in December 1933 Fokker returned to this country. In January 1934 he completed negotiations on behalf of his Dutch company to act as exclusive sales agent for Douglas and Lockheed aircraft companies in Europe, except for Russia. Negotiations for these contracts were instituted by Carter Tiffany and completed by Fokker in California.

While in California in 1934 Fokker had an operation on his nose. The operation was to relieve his difficulty in breathing, due to a condition which he called "asthma." The operation brought some relief, but was not as successful as he had hoped.

After securing the agency contracts with Douglas and Lockheed, Fokker returned to Europe. During the remainder1948 U.S. Tax Ct. LEXIS 140">*153 of 1934 and in 1935 and 1936 Fokker traveled extensively, selling American planes for his Dutch company. American planes were sold in Holland, Belgium, France, Rumania, Poland, Ireland, Inner Mongolia, Spain, Sweden, Turkey, and perhaps other countries. In 1935 about 62 planes were sold and a larger number was sold in 1936. Fokker was very pleased with the agency contracts and threw all his power and prestige into effecting sales for his Dutch company.

In the fall of 1934 Fokker purchased a chalet or house near St. Moritz, Switzerland, in the beautiful Engadine Valley. The property cost him 80,000 to 100,000 Swiss francs. He immediately set about remodeling the chalet at a cost of an additional 80,000 Swiss francs. At the 1934 rate of exchange for 160,000 Swiss francs, the property after remodeling, cost Fokker $ 51,785.60. Subsequent to the remodeling, Fokker acquired additional land around this property at an undisclosed cost. During the remodeling Fokker made a number of trips from Amsterdam to supervise the alterations. He named the property Ober Alpina.

The chalet, after remodeling, had 10 rooms, 4 baths, a bay and secondary rooms, plus a garage. It had an air-conditioned1948 U.S. Tax Ct. LEXIS 140">*154 central heating system that used oil for fuel. It was furnished in Dutch style and had a typical Dutch fireplace in the living room. Fokker always flew the Dutch flag at Ober Alpina and occasionally the Swiss flag. The chalet was staffed with servants, some of whom lived in the house. Additional servants were employed as needed. Fokker asked the 10 T.C. 1225">*1232 daughter of Dutch friends, a Miss deLeuw, a person of independent means, to come to St. Moritz and run Ober Alpina for him. Miss deLeuw accepted and from 1934 until his death, she managed Ober Alpina and acted as Fokker's official hostess. The chalet was used a great deal for entertaining relatives, friends, business associates, potential customers, and government and airline officials. When at Ober Alpina Fokker customarily worked each morning in his bedroom, making long distance calls, holding conferences, and directing his business affairs.

Fokker took an active part in the life of St. Moritz. He was widely known among the people there, including the local authorities. The native population numbered about 4,000, but St. Moritz had 6,000 hotel beds and about 6,000 hotel employees. St. Moritz was primarily a holiday 1948 U.S. Tax Ct. LEXIS 140">*155 resort for foreigners, seldom used by the Swiss. The decedent was interested in winter sports, attended the various exhibitions in sports, was a member of the St. Moritz Bobsled Club prior to the acquisition of Ober Alpina, and gave a special prize for ski racing. He was also interested in establishing an airport at a small town near St. Moritz.

Another activity of the decedent while he was at Ober Alpina was the development of a snow plow to clear the road from his place to St. Moritz. He employed a Swiss engineer, who spent two winters at the chalet assisting Fokker in the development and experimentation on the snow plow. After arranging for the pleasure of his guests, Fokker frequently saw no more of them until evening. He became so engrossed in the snow plow that his guests accused him of spending more time at the blacksmith's than with them. The snow plow was of rotary type and Fokker became very enthusiastic about its commercial possibilities, particularly in Switzerland.

In a letter postmarked August 19, 1935, the day Fokker arrived in America, he wrote Miss deLeuw, in part, as follows:

I have had little opportunity to tell you how highly I appreciate your help, administration1948 U.S. Tax Ct. LEXIS 140">*156 and company, how it is a load off of my mind to know that I can go for my pleasure to Ober Alpina and always find a home there with a pleasant atmosphere. I have enjoyed myself there without reserve and have had peace, and I thank this for a great part to you.

Fokker found the high altitude and dry air at St. Moritz favorable to the sinus condition which troubled him.

In September 1935 Fokker executed a will in New York in which he described himself as a "citizen of The Kingdom of the Netherlands, temporarily sojourning in the United States of America." The will named Fokker's mother, who resided in Holland, as his sole heir, and named Carter Tiffany and the treasurer and the accountant of his Dutch company, who advised him on his financial affairs in Europe, as 10 T.C. 1225">*1233 executors. Tiffany was granted full authority to act with respect to decedent's property in the United States and the Dutch executors like authority as to all property outside of the United States.

While in this country in 1935 Fokker instructed Tiffany to submit his resignation to the various clubs of which he was a member except two, namely, the Montauk Yacht Club and the New York Athletic Club.

In May 1936 1948 U.S. Tax Ct. LEXIS 140">*157 Fokker attended a national celebration in Amsterdam, Holland, of the twenty-fifth anniversary of the construction and flight of his first plane. Dutch Army, Navy, and Government officials attended and Queen Wilhelmina decorated him with the highest order of the Kingdom. In conjunction with this celebration, Fokker created a fund to assist young aviators. The fund was created in Holland and the trustees and beneficiaries were Dutch.

Under date of October 16, 1936, from Alpine, New Jersey, Fokker wrote Major General Oscar Westover, Chief of Air Corps, War Department, Washington, D. C., confirming a conversation with him:

* * * and General Arnold, in which I disclosed my desire of continuing my activities as airplane designer and manufacturer in this country. * * *

After severing all relations with General Motors I am again entirely free from any obligations to any individual or corporation, for my designs in the United States. In Holland I am the dominating and controlling stockholder of the Netherlands Aircraft Manufacturing Company, which manufactures airplanes largely for the Dutch Army, Navy, Colonial air forces, and the Dutch operating airline, KLM. Owing to a lack of policy1948 U.S. Tax Ct. LEXIS 140">*158 of the Dutch Government, very limited development funds, export facilities restricted to the smaller countries in Europe, its dependence for engines, materials and accessories upon foreign industries, its industrial possibilities are limited and largely confined to local and national activities. Therefore this enterprise has always been of secondary interest to me.

After mentioning a new plane designed for transatlantic service or a long-distance heavy bomber, a new pursuit or observation plane equipped with very powerful armament, and an entirely new bomb-launching device, Fokker asked whether the United States Air Corps (1) would be interested in securing his designs and services exclusively for the United States; (2) was interested in any one of the above designs; and (3) would use available funds for development or design contracts with an American-owned and controlled company which Fokker would be connected with or organize, provided such company and his connections were satisfactory to the State and War Departments? General Westover was requested to take up the matter with the proper authorities in the State and War Departments.

Under date of October 20, 1936, General Westover1948 U.S. Tax Ct. LEXIS 140">*159 replied that the United States would desire to obtain design disclosures exclusively for its benefit if the disclosures to be made justified that action; that further examination would be necessary to determine whether the 10 T.C. 1225">*1234 designs called for such action; that under certain conditions it was possible, when funds were available, to secure a development contract for the bomb-launching device if it proved to be a great advance; that airplane development contracts were normally entered into after open competitions. General Westover's letter then stated:

I wish to advise you, however, before I can consider further negotiations with you with respect to design disclosures, you should yourself take up with the State Department and the Department of Commerce the clarification of your status in this country, so as to make it certain that you may enter into contractual relations with the War Department in connection with such design development as the situation may warrant.

This letter was addressed to Fokker at Alpine, New Jersey.

In reply, Fokker wrote General Westover from Alpine, New Jersey, on October 22, 1936, in part, as follows:

As you can well realize I have given this 1948 U.S. Tax Ct. LEXIS 140">*160 whole subject considerable thought, and I have arrived at the following conclusions:

1. I feel that I can best serve the interests of everyone concerned if I am not burdened with the organization of a new company and its commercial development, but rather left free to concentrate on the study of airplane developments in general, both commercial and military, completing my present ideas and evolving new ones.

2. I feel that I am at a disadvantage as a non-resident alien in negotiating contracts with the American Government.

3. I believe our common interests can best be served by a business and financial arrangement with one of the large recognized aviation companies in America.

Necessarily the details of such an arrangement to be worked out must await negotiations, and in the meanwhile I would appreciate your frank comments, and, if possible, your approval of such an arrangement.

General Westover responded on October 30, 1936 as follows:

Mr. Anthony H. G. Fokker:

Alpine,

New Jersey.

My dear Mr. Fokker:

Receipt is acknowledged of your letter of October 22, 1936, in which you requested my comments and approval of a business and financial arrangement between yourself and some large1948 U.S. Tax Ct. LEXIS 140">*161 aviation company in America. As stated in my letter of October 20, 1936, any negotiations between this office and yourself must, of necessity, depend on such an arrangement as will be satisfactory to the State Department and the Department of Commerce.

The details of organization and development of a new company constitute a great burden. As a designer and builder of new aircraft, I feel sure that you would wish to avoid such a burden if other satisfactory arrangements can possibly be made. Surely a designer can function most efficiently if he is free from such encumbering details.

* * * *

Shortly after the above exchange of correspondence and on November 11, 1936, Fokker sailed for Europe. In the interim he purchased a large house at Nyack, New York, fronting on the Hudson River. 10 T.C. 1225">*1235 Title to the property was taken, or subsequently transferred, to Fokker's wholly owned domestic corporation, namely, Pulpit Rock Corporation. Prior to sailing Fokker called the architect who designed the Nyack house to his place at Alpine, New Jersey, and he and the architect went over the building plans together. At that time Fokker sketched out a number of alterations which he desired1948 U.S. Tax Ct. LEXIS 140">*162 to be made. The remodeling was carried out by Tiffany and the architect to the best of their ability as Fokker gave no satisfactory reply to their inquiries sent to him in Europe. When Fokker returned in June 1937 the remodeling was about 40 per cent completed. Thereafter he supervised the remodeling, built on a first floor sunroom, and a special bedroom and bath for himself on the second floor, with glass windows on three sides, had a channel dredged in the Hudson to his property, built a boathouse, and installed mechanical and household items for his personal convenience, including sliding doors and window glass electrically operated by remote control, a projector booth, and a concealed screen.

Fokker paid $ 40,000 or $ 45,000 for the land and improvements at Nyack, which included a property across the road from the main house on which was a four-room house and barn. He spent an additional $ 75,000 or $ 80,000 for alterations. He named the Nyack house Undercliff Manor.

After remodeling and additions, Undercliff Manor was a 22-room house, including 5 bathrooms. It had a living room, kitchen, breakfast room, dining room, billiard room, and breakfast room for the help on the 1948 U.S. Tax Ct. LEXIS 140">*163 ground floor. It had five bedrooms, one dutch room and four bathrooms on the first floor. The garret had four bedrooms for maids. The basement had a shooting gallery, laundry and architectural workroom. The house had a pipe organ and an oil-burning heating system. The grounds consisted of approximately 19 acres. Near the main house was a large garage with upstairs bedrooms. In front of the house, and extending into the Hudson River, was a dock with equipment for docking several boats, and a boathouse.

Undercliff Manor was furnished, partly with furniture used at the Alpine house and partly with new furniture purchased therefor. Servants were installed and thereafter the house was physically occupied by Fokker or was ready for his occupancy at all times until his death. Fokker had approximately 10 servants and employees in the United States in 1937, a few more in 1938, and about 20 in 1939. At Ober Alpina he usually had 4 employees, plus his official hostess.

In May 1937 the lease on the Alpine, New Jersey, house expired and it was not renewed.

In 1937 Fokker began to design a boat that had been taking form in his mind. He built a model or "mock-up" of the boat in the basement1948 U.S. Tax Ct. LEXIS 140">*164 10 T.C. 1225">*1236 at Undercliff Manor. In the fall of 1937 he contracted with the Consolidated Shipbuilding Co., Morris Heights, New York, for construction of the boat, which was 110 feet over-all when completed. The boat was named "QED" after the Latin maxim "quod erat demonstrandum." Fokker hoped to prove that a boat could be built with airplane construction and still be as strong, or stronger, than boats of orthodox construction.

In or about September 1937, Fokker secured a contract with Consolidated Aircraft Corporation for the sale of its planes in Europe by the Dutch company. A similar contract was secured with North American Aviation. An effort was made earlier in 1937 for a contract with Boeing Airplane Co., but the negotiations failed.

Fokker left for Europe on or about November 13, 1937. Upon his return on March 18, 1938, he spent practically all of the next eight months working on the QED at the Consolidated Shipbuilding Co. He set up an office at the shipyard, employed bookkeepers to keep track of the cost, and employed two or three engineers and a secretary. The boat was launched in June 1938. Fokker arranged for his mother to speak from Holland at the launching1948 U.S. Tax Ct. LEXIS 140">*165 by long distance telephone over a loud speaker system. Approximately 200 of his friends attended the launching. The QED, the Helga and the Vixen were registered in Holland, while his smaller boats were registered in the United States. All of his boats flew the flag of the Royal Dutch Yacht Club of Holland.

Late in 1937 or early in 1938 Fokker, at Tiffany's suggestion, began disposing of a portion of his stock in the Dutch company. The sales were made to get himself in a liquid position if the anticipated war in Europe developed. The stock was listed on the Amsterdam Exchange and at or about the same time the name of the Dutch company was amended by added "Fokker" thereto to identify the stock with his European enterprise. Fokker sold about 65 per cent of his ordinary, or common, shares in the Dutch company. After selling this stock, he still retained control with 90 per cent of the preferred stock and about 35 per cent of the common.

When the European situation became critical in 1938 and 1939, Fokker liquidated many of his foreign investments, and transferred the proceeds to the United States. The amount transferred was over $ 2,850,000. Fokker's deposit with1948 U.S. Tax Ct. LEXIS 140">*166 the agents, Bank of Montreal, New York, New York, gave his address as Chalet Oberalpina, St. Moritz, Switzerland, but provided that, "Statements of account, vouchers and all csp. to be addressed to him as follows: c/o Mr. Carter Tiffany, 61 Broadway, Room 1906, New York City." Prior to his death, Fokker, as managing director of the Dutch company, transferred part of its liquid assets to this country for safekeeping. Some of the funds 10 T.C. 1225">*1237 of the Dutch company was deposited with the Guaranty Trust Co. of New York. The Guaranty Trust was advised by the Dutch company that its managing director, A. H. G. Fokker, was the only person authorized to sign alone on behalf of the Dutch company, whereas in all other cases two signatures were necessary. Among the documents filed with Guaranty Trust by the Dutch company was a statement by the acting secretary of the Commercial Register of the Chamber of Commerce and Industry of Amsterdam, duly authenticated by the United StatesConsul, that the sole director of the Dutch company was "Anthonie Herman Gerard Fokker, residing in Nyack (N. Y.) U. S. A., a Netherlander."

On or about June 7, 1938, Fokker filed an application with the United1948 U.S. Tax Ct. LEXIS 140">*167 States Federal Communications Commission for a ship radio station license, in which he gave his post office address as North Broadway, Nyack, New York.

In July 1937 and in May and June 1938, Fokker filed applications for patents with the United States Commissioner of Patents in which he described himself as "a resident of Nyack in the County of Rockland and State of New York."

In June 1938 Fokker purchased a small boat from the Dunham Sales Co. of City Island, New York. In his application to the United States Coast Guard for a number for an undocumented motor vessel, Fokker gave his address as "Nyack, N. Y." and the citizenship of the owner of the boat as "USA."

In or about 1938, Fokker invested $ 25,000 in the preferred stock of S. M. Development Co., a domestic corporation, all of the preferred stock of which was owned by Fokker and all of the common stock by Carter Tiffany. Fokker contracted with the Development Co. that he would not enter into business, but would turn over to the Development Co. any ideas that he thought might be worth looking into and developing. He turned one idea over to the company for the development of a hydraulic mechanism for controlling clutches on1948 U.S. Tax Ct. LEXIS 140">*168 yacht engines. The company spent approximately $ 12,000 on the development of this mechanism before it was dropped. In addition to his investment in the company, Fokker loaned it $ 12,000 or $ 15,000. At the time of Fokker's death the Development Co. had been acting as purchasing agent for the Dutch company for a short period of time.

Fokker departed for Europe on December 2, 1938, and returned therefrom on May 10, 1939. During this interval he employed a consulting economist to study and report on the Dutch company. He wished to inform himself in greater detail as to its affairs and to tighten his control over it. He tried also to start an aircraft factory in Switzerland in order to sell planes to France. Negotiations for the Swiss factory were conducted in part at St. Moritz. He also 10 T.C. 1225">*1238 tried to get hold of the other aircraft factories in Holland as he wanted to unite all the aircraft factories in Holland.

In returning to this country in 1939 Fokker filled out an application for immigration visa (nonquota) in London, England, which he swore to before an American consul. The application states that he intended to "return home," which was stated to be Nyack, New York, 1948 U.S. Tax Ct. LEXIS 140">*169 and that he intended to remain there "permanently," and that he based his claim that he was a nonquota immigrant on the fact that he was a "returning alien resident" under section 4 (b), Immigration Act of 1924, as amended.

During the summer of 1939 Fokker took a cruise to Maine on the QED with a group of friends whom he had invited to come over from Holland for the cruise. Upon the departure for Europe of one of his friends who had come to this country for the cruise, Fokker told him, "Well, we will see each other as soon as possible in Ober Alpina."

In October 1939, the QED was destroyed by fire.

On November 28, 1939, Fokker obtained a passport from the Dutch ConsulGeneral in New York to go abroad. The passport stated that his "domicile" was Nyack, New York.

On or about December 1, 1939, Fokker had a manipulation on his nose in an effort to relieve his breathing. The next day he was taken, unconscious, to a hospital in New York. He died without ever regaining consciousness. His body was cremated and the ashes were returned to Haarlem, Holland, for burial.

From 1926 until the year of his death, the manifests of the various ships that bore Fokker to the United States1948 U.S. Tax Ct. LEXIS 140">*170 show a home or business address in New York or New Jersey. The ship's manifest on March 18, 1938, shows his home as "North Broadway, Nyack, N. Y."; the 1939 ship manifest shows "Nyack, N. Y." None of the ship's manifests mention St. Moritz, Switzerland. Each ship's manifest from 1926 on states that Fokker did not intend to return to the country of departure; that he intended to remain permanently in the United States; and that he intended to become a citizen of the United States.

The records of the Immigration Service of the Department of the Interior show that Fokker came to this country as a quota immigrant from Holland in 1926. His declaration of intention to become an American citizen and to permanently reside therein was filed in June 1926, as hereinbefore mentioned. Fokker never thereafter departed from the United States without first securing a permit to reenter this country. Between 1926 and 1939 Fokker applied for 13 reentry permits. The applications for reentry permits listed his residence as Alpine, New Jersey, seven times; New York, New York, four times; and Nyack, New York, the last two times, viz., 1937 and 1938. He 10 T.C. 1225">*1239 listed his temporary address abroad1948 U.S. Tax Ct. LEXIS 140">*171 eight times as Amsterdam, Holland, one time as St. Moritz, Switzerland, in 1937, and four times he failed to give a temporary address abroad. In listing the countries he intended to visit while abroad, he always listed Holland. In stating his reasons for going abroad, Fokker gave "business" in all applications except two; in 1937 and 1938 his reasons for going abroad were stated to be "pleasure."

At the time of his death, Fokker had an account with R. H. Macy & Co., New York, New York, in which his address was given as Nyack, New York, and in which there was a credit balance in his favor of approximately $ 15.

At the time of his death decedent held a New York State automobile operator's license which gave his address as Nyack, New York. He had held this automobile operator's license since 1937. License plates issued by the State of New York in 1938 for a Ford sedan and in 1939 for a Dodge truck gave Fokker's address as Nyack, New York.

At the time of his death, Fokker owned foreign assets situated in Holland, England, and Switzerland. The dollar value of certain of these assets has been stipulated as hereinafter set forth. The guilder value of the assets in Holland and a guilder1948 U.S. Tax Ct. LEXIS 140">*172 deposit in a Swiss bank has been stipulated, but not the value in American dollars. The stipulated fair market values of these assets in dollars or Dutch guilders on December 23, 1940, were as follows:

1948 U.S. Tax Ct. LEXIS 140">*173 10 T.C. 1225">*1240 At the time of his death, Fokker owned 861 shares of common stock out of 2,500 shares issued and outstanding and 45 shares of preferred stock out of 50 shares issued and outstanding of the Dutch company, a Netherlands corporation. The common and the preferred shares had a par value of 1,000 guilders each. The preferred was preferred as to distribution but was limited on distribution in liquidation to 1,000 guilders per share; it was also limited to an annual dividend of 5 per cent on its par value. The preferred stockholders had the power to nominate the persons from whom the managers of the Dutch company were elected at the annual stockholders' meeting. The stock certificates were in Holland.

On or about April 30, 1941, the preferred and common stock of the Dutch company owned by decedent at the time of his death was sold in The Netherlands for 1,630,800 guilders. It is stipulated that 1,630,800 guilders would have been a fair sales price for said shares in The Netherlands on December 23, 1940.

The parties have stipulated that:

The last rate of dollar-guilder exchange prior to the German occupation of The Netherlands on May 10, 1940 was $ 0.5309 per guilder. On or1948 U.S. Tax Ct. LEXIS 140">*174 about the optional valuation date, December 23, 1940, there was no available current market rate of dollar-guilder exchange, as shown by Cumulative Bulletin 1941-1, p. 236. The first rate of dollar-guilder exchange after the termination of such occupation of The Netherlands on May 5, 1945 was $ 0.379 per guilder.

At December 23, 1940, the optional valuation date, Holland had been conquered and was occupied by the German Army. A Dutch Government in exile was located in London. England was at war with Germany and decrees of the British government blocked the transfer of bonds or securities to Holland. Communication between England and Holland was forbidden.

At the time of his death Fokker owned the following American assets, the fair market values of which on December 23, 1940, are stipulated to be as follows: 10 T.C. 1225">*1241

1948 U.S. Tax Ct. LEXIS 140">*175 On January 2, 1940, the Surrogate's Court of Rockland County, New York, appointed Carter Tiffany temporary administrator of decedent's estate. Between January 2 and June 3, 1940, when he was appointed sole executor of Fokker's estate, Tiffany, as temporary administrator, was collecting the assets and ascertaining the debts of the estate. Arrangements were made in March 1940 for the administration of decedent's estate in Switzerland with one Henggeler, an attorney in Zurich, Switzerland. After Tiffany was appointed executor he gave a power of attorney to his Swiss representative, who had been appointed "curator" of the estate. In his accounting to the surrogate's court as executor, Tiffany stated, in part, as follows:

* * * In the administration of the Estate in Switzerland, Dr. Henggeler collected assets and paid debts, including Swiss inheritance taxes assessed against the Estate. Substantially all of the Swiss assets have been converted into dollars and transferred to the United States except the Dutch guilder (H. Fl.) deposit which cannot be converted and the balance of proceeds of sale of the real estate which the beneficiary requested be left on deposit in Switzerland.

Arrangements1948 U.S. Tax Ct. LEXIS 140">*176 were made in London in February 1940 for London and South American Investment Trust Limited, London, England, to act as ancillary administrator with the will annexed.

In Holland, Tiffany and his counsel consulted with the beneficiary, namely, the decedent's mother, with her counsel, and with the other two persons named as executors in Fokker's will, who were citizens and residents of Holland, and failed for that reason to qualify as executors under New York law. The Dutch lawyers differed as to whether the decedent's will was valid under Dutch law. Tiffany was advised that if the will was recognized as valid he would be entitled 10 T.C. 1225">*1242 to exclusive control of all assets in Holland, but if the will was invalid all assets in Holland would pass under Dutch law to Fokker's mother and sister in equal shares. Arrangements were made, upon the advice of Dutch counsel, to follow the Dutch procedure in so far as practicable in locating decedent's assets and arranging for payment of his debts. For this purpose an agreement was entered into with a notary of the city of Amsterdam, who advertised widely requesting creditors and debtors to advise him of their debts and credits within 60 1948 U.S. Tax Ct. LEXIS 140">*177 days. Four newspapers in Holland and one in the Dutch East Indies were used, the first publication being March 27, 1940, the information to be furnished by May 26, 1940. On or about May 10, 1940, the German Army invaded Holland and within a few days overran the country. Thereafter the disposition of property in Holland became subject to German control regulations and communication with Holland was difficult. The accountings made by Tiffany to the surrogate's court, first as temporary administrator and later as sole executor of decedent's estate, reflect the assets collected and the debts paid by virtue of his agreement with the notary in Amsterdam.

The balance sheet of the Dutch company as of December 31, 1939, shows total assets of 10,720,780.16 guilders, the largest assets of which were work in process, 5,267,138.03 guilders, and cash in hand or in banks, 3,080,310.59 guilders. Of the cash on hand or on deposit in banks, $ 1,095,882.42 was on deposit with the Guaranty Trust Co. of New York at the time of Fokker's death. Subsequent to Fokker's death and prior to the invasion of Holland on May 10, 1940, additional funds of the Dutch company were transferred to the United States, 1948 U.S. Tax Ct. LEXIS 140">*178 so that when the Germans conquered Holland the Dutch company had cash in the Guaranty Trust Co. in New York and in the agents, Bank of Montreal in New York, in excess of $ 2,558,000, or about 45 per cent of its total assets on December 31, 1939. The outstanding capital stock, consisting of 2,500 shares of common and 50 shares of preferred, as hereinbefore mentioned, was carried on the balance sheet as liabilities of 2,500,000 guilders and 50,000 guilders, respectively, or 1,000 guilders per share.

Sales of the Dutch company common stock on the Amsterdam Stock Exchange for the years 1938 to 1941, inclusive, show the following high and low quotations for each year:

10 T.C. 1225">*1243 The closing quotation of December 31, 1940, on the Amsterdam Exchange was 1,940 guilders.

After his appointment as sole executor of Fokker's estate on June 3, 1940, Tiffany, as executor, filed a complaint, dated June 4, 1940, in the Supreme Court of Rockland County, New York, seeking appointment as receiver of the Dutch company's assets in the United States. Decedent's estate was a creditor1948 U.S. Tax Ct. LEXIS 140">*179 of the Dutch company, and this action was taken to preserve the Dutch company's assets after authorization therefor was obtained from the surrogate's court. On June 5, 1940, the Supreme Court of Rockland County appointed Tiffany temporary receiver of the Dutch company. Tiffany's appointment as receiver was concurred in and requested of the court by the Royal Netherlands Government through its minister, Alexander Loudon, who advised the court that his government had authorized him to give Tiffany temporary and revocable power to act on behalf of The Netherlands Government in the interest of the Dutch company. A summary of the assets and liabilities of the Dutch company in the United States shows that on June 5, 1940, its United States assets totaled $ 2,857,525.55, and its United States liabilities totaled $ 147,558.10, or net United States assets of $ 2,709,967.45. On August 28, 1940, Tiffany was appointed permanent receiver of the Dutch company.

By Executive Order No. 8389, dated April 10, 1940, and by subsequent amendments thereto, the United States prohibited transactions in foreign exchange, transfers of credit, and the export of coin and currency, except as specifically authorized1948 U.S. Tax Ct. LEXIS 140">*180 in regulations or licenses issued by the Secretary of the Treasury pursuant to the Executive Order. Under this order the funds of the Dutch company in the New York banks were "blocked" from and after May 10, 1940. The accounts remained "blocked" in so far as this country was concerned until some time after March 26, 1947, when the balances were transferred to the Federal Reserve Bank in New York for the account of Nederlandsche Bank in Amsterdam in favor of the Dutch company.

By decree of the Royal Netherlands Government in exile, located in London, dated May 24, 1940, foreign assets of Netherlands corporations and residents, such as dollar balances with United States banks, were vested in the State of The Netherlands as represented by the government in exile. The United States recognized the decree and accepted the authority of The Netherlands minister to the United States to operate all accounts and other assets in the United States belonging to The Netherlands Government. It was under this decree that the Dutch minister, Alexander Loudon, granted Tiffany temporary and revocable power to act on behalf of The Netherlands.

On or about June 24, 1940, the German occupation authorities1948 U.S. Tax Ct. LEXIS 140">*181 issued its "Foreign Exchange Decree 1940," sometimes known as the "Devisen 10 T.C. 1225">*1244 Decree," which required a license from the Devisen Institute for foreign exchange transactions. Under this decree a license would have been necessary from the German occupation authorities to sell the Dutch company shares for a foreign currency. Such a license would probably have been refused at December 23, 1940.

Subsequent to decedent's death, Tiffany did not at any time bring any assets of the estate from The Netherlands to the United States. He did transfer Swiss francs to the Bank of Montreal, but was unable to convert Dutch guilders in Switzerland into Swiss francs.

In accounting to the surrogate's court for his administration of decedent's estate and to the Supreme Court of Rockland County as receiver for the Dutch company, Tiffany converted guilders at the official rate of exchange on December 23, 1939, namely, $ 0.531 per guilder. In one or two of the claims of the estate against the Dutch company the rate of exchange at May 10, 1940, of $ 0.522 per guilder was used, but this settlement by the Dutch company out of its New York funds was refunded when it was discovered in or about 19431948 U.S. Tax Ct. LEXIS 140">*182 that payment of the claims had been made in The Netherlands in guilders.

In determining the deficiency, the respondent converted guilders at the official rate of exchange on December 23, 1939.

At the optional valuation date, December 23, 1940, there was no official rate of exchange for Dutch guilders. The fair market value of a Dutch guilder in New York on December 23, 1940, was $ 0.05 per guilder.

At the time of his death Fokker was a resident of (domiciled in) Nyack, New York.

In determining decedent's estate subject to tax, the following stipulated expenses of administration and claims should be allowed:

1948 U.S. Tax Ct. LEXIS 140">*183 10 T.C. 1225">*1245 The omitted portions of the stipulated facts are incorporated herein by reference.

OPINION.

The first question is whether decedent was a resident of the United States at the date of death. The Internal Revenue Code imposes an estate tax upon the net estate of every decedent, citizen or resident of the United States, dying after its enactment. Sec. 810. Fokker was not a citizen of the United States at any time. If the estate is liable for tax, it is because Fokker died a resident of the United States. A resident of the United States, under the applicable regulations, is one who, at the time of his death, had his domicile in the United States. Sec. 81.5, Regulations 105. Section 81.5 also states that:

A person acquires a domicile in a place by living there, for even a brief period of time, with no definite present intention of later removing therefrom. Residence without the requisite intention to remain indefinitely will not suffice to constitute domicile, nor will intention to change domicile effect such a change unless accompanied by actual removal.

In this case the petitioner concedes that Fokker established a domicile in the United States in or about 1926 1948 U.S. Tax Ct. LEXIS 140">*184 or 1927. It is contended that he abandoned his domicile here when he acquired his house in St. Moritz, Switzerland. It is further contended that his domicile thereafter remained in Switzerland, despite his purchase of the Nyack house, unless it can be shown that he intended to give up his Swiss home and establish a new place of abode at Nyack. In other words, petitioner argues that decedent's intention to make Switzerland his home is presumed to continue until the end of his life.

We think the fallacy in this argument is the premise upon which it is based. We can not find from the facts of record that decedent intended to, or did, abandon his domicile in the United States. Never having abandoned his American domicile, it is axiomatic that no change of domicile occurred. It is true that Fokker was absent from this country periodically during the time that petitioner contends he acquired a domicile in Switzerland. Such absence, even though long continued, is insufficient, however, to effect a change of domicile. "There must be," as the Supreme Court pointed out in Mitchell v. United States, 88 U.S. 350">88 U.S. 350, "the animus to change the prior domicile1948 U.S. Tax Ct. LEXIS 140">*185 for another. Until the new one is acquired, the old one remains."

The facts herein are ample, in our opinion, to disprove any intent of the decedent to abandon his American domicile. Our findings show that at no time from 1927 until his death was Fokker without an American home fully staffed with servants. The nature of his business and the scope of his varied interests were such that his physical 10 T.C. 1225">*1246 occupancy of his American homes was of short duration. But he did maintain at all times after 1927 a home in America to which he could and did continually return. He repeatedly, and without exception, stated under oath to immigration officials that his residence was in New York or New Jersey, in order to secure permits to reenter this country. Petitioner attempted to explain these sworn statements away by testimony that the making of such statements eased decedent's travel difficulties to and from Europe. We are not impressed by this explanation. We think decedent's sworn statements of his intentions to return to this country and that his absences were temporary and principally for business reasons are entitled to more weight than the testimony aforementioned. See L. E. L. Thomas, 33 B. T. A. 725,1948 U.S. Tax Ct. LEXIS 140">*186 and portion of opinion quoted in footnote. ¹

Our findings are studded with other business, personal, and factual incidents of Fokker's life indicating1948 U.S. Tax Ct. LEXIS 140">*187 that his actual residence was in this country. We need not summarize these incidents, but pass directly to petitioner's contention that Fokker's activities in 1935 and 1936 show his intention to abandon this country as his domicile and to establish a new domicile in Switzerland. The contention that St. Moritz became his new domicile rests primarily upon his purchase of Ober Alpina. In fixing Ober Alpina as Fokker's new domicile, petitioner contends that consideration should be given to its physical characteristics, the time he spent there, the things he did there, the persons and things therein, his mental attitude toward it, his intention when absent to return thereto, and a comparison with his other dwelling places, citing Restatement, Conflict of Laws, sec. 13. We shall examine the facts with respect to these factors in the order stated.

Physically, Ober Alpina was larger than decedent's home at Alpine, New Jersey, but smaller than Undercliff Manor on the Hudson. Any comparison of his own houses would have to be between his New York and his St. Moritz houses, since the Alpine house was occupied under a lease. At both properties Fokker made extensive alterations for his own1948 U.S. Tax Ct. LEXIS 140">*188 convenience. From the standpoint of expenditures, his alterations at Undercliff Manor were much more expensive. One outstanding difference between the two places should be noted here. St. Moritz was a resort town, which specialized in the entertainment of foreign tourists, but attracted very few Swiss. It is internationally 10 T.C. 1225">*1247 famous for its scenery and winter sports. Nyack, New York, on the other hand, had no such international appeal, and decedent's acquisition of this place of abode must have been for a different reason. Both houses were substantial, permanent structures, suitable for year-round living, and we can not say that the specially designed bathtub and mechanical conveniences of St. Moritz have more probative weight than the mechanical conveniences, pipe organ, projection booth, and concealed screen of Undercliff Manor. The mechanical experiments at Ober Alpina with a snowplow are completely overshadowed by the designing and construction of the QED. The winter sports of St. Moritz were offset by the yachting and fishing on his boats from Nyack and Montauk.

Petitioner points out that during 1935 and 1936 Fokker was actually present at Ober Alpina about1948 U.S. Tax Ct. LEXIS 140">*189 eight months, but contends that this does not convey a full picture of the time he spent there, since he kept it fully staffed and open at all times until his death. But it is equally clear from the facts that Fokker maintained his Alpine and Nyack houses open and staffed at all times from 1927 until his death. If time spent in Undercliff Manor after its purchase be compared with the time spent in Ober Alpina over the period that Fokker maintained both houses, it is at once apparent that Undercliff Manor was his principal residence. Furthermore, the facts, and petitioner's contentions, show that much of Fokker's time in Europe was spent away from Ober Alpina for business and other reasons.

Fokker's activities at Ober Alpina were of a social and business nature. The facts show that he used it to entertain his personal friends and relatives, as well as his business acquaintances. His business activities there seem to have been the more important. It is shown, for example, that he usually spent his mornings in bed conducting his business affairs by conferences and long distance telephone calls. He entertained prominent government and air line officials there, business acquaintances, 1948 U.S. Tax Ct. LEXIS 140">*190 and officials of the Dutch company -- all for the purpose of promoting his business interests. Indeed, one of petitioner's witnesses stated that Fokker wanted Ober Alpina in order "to be able to entertain there people who had interest, like Dutch Ministers and foreign ministers, to invite them for lunch and dinner and have them out there and to get in good contact with them, for which purpose it was a good place." Again, in describing Ober Alpina, this witness stated that Fokker "had a place what we would call nowadays for public relations purposes." Entertainment other than for business reasons seems to have been confined largely to Christmas and New Year's parties for relatives and friends.

We think the manner in which Fokker operated Ober Alpina is enlightening. Being a widower, he sought the services of the daughter 10 T.C. 1225">*1248 of an old friend of the family to act as his official hostess. This lady had independent means and was not in the employ of Fokker. Her operation of the house and management of the servants made it certain that important house guests would be properly entertained and their needs provided for. It is urged that the presence of an official hostess at Ober1948 U.S. Tax Ct. LEXIS 140">*191 Alpina and the absence of such a hostess at any other home maintained by Fokker is practically conclusive evidence that Ober Alpina was his only home. We are not persuaded by this argument. We think Fokker installed an official hostess to insure the success of his social and business entertaining; that business guests were of primary importance in the use of Ober Alpina; and that he used it primarily to assist him in his business transactions. We do not mean to say that Fokker derived no personal benefits and pleasures from his house in St. Moritz. He certainly benefited in so far as his sinus condition was concerned by his sojournings in Switzerland. But we can find no conclusive evidence in these factors that justify a determination that Fokker established a new domicile in Switzerland.

We should like to comment further on the factor of persons and things at the alleged new domicile. Although insisting that Fokker had changed his domicile to Switzerland, petitioner points out that the paraphernalia, furnishings, and paintings were essentially Dutch, as was the decedent. It is also pointed out that Fokker brought a solid silver service from the United States which he used 1948 U.S. Tax Ct. LEXIS 140">*192 in Ober Alpina, and it is urged that under the decision in In re Trowbridge's Estate, 266 N.Y. 283; 194 N.E. 756, ² this act showed an intention on the part of Fokker to change his domicile. We note, however, that Fokker furnished his Alpine house, in part at least, with furniture and furnishings acquired by him while living in Germany, which he shipped to Holland and from there to America. Concededly he had an established domicile in America in 1927, and our findings show that, with minor exceptions, of which the silver service is undoubtedly one, all of the furniture and furnishings brought over here and used in establishing his American domicile remained in this country and was a part of his personal property in this country at the time of his death. The Trowbridge case would, therefore, support the decision which we have reached.

1948 U.S. Tax Ct. LEXIS 140">*193 Petitioner asserts that Fokker prized Ober Alpina as a home in the truest sense. As proof of this mental attitude on Fokker's part, our attention is directed to a statement made to his hostess in a letter postmarked August 19, 1935. We have set forth the pertinent portion of the letter in our findings. Petitioner emphasizes that portion of the 10 T.C. 1225">*1249 statement in which decedent says he could go to Ober Alpina "and always find a home there * * *." We think the statement should be read in its entirety. When so read, a different meaning results. Fokker was expressing appreciation to Miss de Leuw for her "help, administration and company." He said, further, that because thereof it was a load off of his mind to know that he could go to Ober Alpina for his pleasure and always find a home there with a pleasant atmosphere. He did not say, or mean, that she had made a home for him; she was his official hostess. What he meant and said was that she had created a homelike atmosphere which he enjoyed and which he found peaceful and restful. The statement was a compliment to Miss de Leuw's ability and success as the official hostess and manager of a rich man's show place at an international1948 U.S. Tax Ct. LEXIS 140">*194 resort. We have no doubt that Fokker was proud of his Swiss chalet and its accoutrements. We are convinced that he used every means that wealth commands to make his guests comfortable and satisfied. But, even so, we can not say that he acquired and renovated Ober Alpina with the intent of making it his permanent home.

The next factor for consideration is Fokker's intention to return to Ober Alpina when absent therefrom. Petitioner contends that the best evidence of Fokker's intention when absent from St. Moritz to return is the fact that he always did. But this statement is equally applicable to the United States, and it is particularly true with respect to his absences from Holland. Our findings show that he was born a Dutchman, lived a Dutchman, and died a Dutchman. His closest relatives resided in Holland. When he went abroad from America he always went to Holland. He prided himself as being the "Flying Dutchman." His furnishings at St. Moritz were Dutch, he flew the Dutch flag from his Swiss chalet, and the Royal Dutch Yacht Club emblem from his boats. He died a citizen and subject of Holland. He was buried in Holland. He had no interests in Switzerland except the 1948 U.S. Tax Ct. LEXIS 140">*195 chalet which he used for winter sports, business, and entertainment purposes. He probably would have returned to Switzerland year after year for its winter sports, its gay holiday atmosphere, and for his health's sake, a custom he had followed before he acquired Ober Alpina. But this custom is not the equivalent of domicile. And any inference of domiciliary intent therefrom is rebutted by the continuous precaution on his part to insure his reentry into America before he left for Europe. One does not go to his domicile with the fixed intention of leaving for the place of his departure within a year. It is much more reasonable and logical to say that the place from which he departed and to which he intended to return within the year was his fixed place of abode.

10 T.C. 1225">*1250 Much has already been said about the physical characteristics of the plural homes maintained by Fokker. The situation here is not comparable, therefore, to the maintenance of a hotel room or a small apartment as compared with a home owned and maintained elsewhere. It is conceded that petitioner established a domicile in this country in or about 1927. From that date until his death he maintained a home staffed1948 U.S. Tax Ct. LEXIS 140">*196 and ready for occupancy at all times. When he acquired the Nyack house he did not renew his lease on the Alpine house, a place he had rented and occupied from time to time for about ten years.

In discussing the documentary evidence in the voluminous record in this case petitioner points in particular to the will of the decedent and to a statement made by him in the exchange of correspondence with Major General Oscar Westover. In his will decedent specifically referred to himself as "a citizen of the Kingdom of the Netherlands, temporarily sojourning in the United States of America." Petitioner sees in this formal statement a refutation of any American domicile. When it is considered that this is the year in which petitioner is contending that Fokker established a new domicile in Switzerland, it is a fact that cuts both ways. Certainly there is nothing in the quoted portion of the will to indicate that Fokker had established his domicile at St. Moritz. On the contrary, he gave to his executors in Holland full authority to act with respect to all his property outside the United States, and gave Tiffany like authority over his United States property. No mention is made of Switzerland1948 U.S. Tax Ct. LEXIS 140">*197 or a home in Switzerland. As previously stated herein, Fokker lived and died a Dutchman, and, when he thought in terms of his property after his demise, it was to Holland that he turned for his sole beneficiary, and for his executors except for his United States property.

The second statement made by Fokker to which petitioner attached great significance is contained in the correspondence set out in our findings. The background of the correspondence is important to a proper understanding of the statement relied on by petitioner. As clearly appears from the letters, Fokker had perfected certain designs for a bomber, a pursuit ship, and a bomb-launching device which he wanted the War Department to advance funds to develop, the designs to become the exclusive property of the United States. In his first letter he pointed out his desire of continuing his activities in this country as a designer and manufacturer of airplanes, and stated that his Dutch company enterprise had always been a matter of secondary interest to him because of Holland's lack of development funds, lack of policy, lack of economic resources, and dependence upon foreign industrial production, and that he would like1948 U.S. Tax Ct. LEXIS 140">*198 to secure development funds or design contracts from the United States Air Corps with a Fokker-organized or controlled American company. He requested 10 T.C. 1225">*1251 Westover to take up the matter with the proper authorities in the State and War Departments. Westover replied that Fokker would have to clarify his status in this country with the State and Commerce Departments before the Air Corps could consider further negotiations. It was in reply to Westover's letter that Fokker made the statement that he felt he was at a disadvantage as a nonresident alien in negotiating contracts with the American Government. This statement is but one of three conclusions which Fokker stated he had reached in considering the problem of developing the designs in question. The other two considerations are equally a part of the whole subject about which Fokker stated he had given "considerable thought" in arriving "at the following conclusions." First, that he should not be burdened with the organization of a new company and its commercial development, but should concentrate on commercial and military designing for airplanes; second, his feeling that he was at a disadvantage in negotiating contracts; 1948 U.S. Tax Ct. LEXIS 140">*199 and third, that a business and financial arrangement with one of the large recognized aviation companies in America would best serve the interests of all concerned.

Whatever Fokker may have had in mind in stating to Westover that he was a nonresident alien on October 22, 1936, it is a fact that within three weeks thereafter he had purchased the Nyack estate and ordered certain alterations to be made. If his characterization of himself as a nonresident alien at that time is to be considered conclusive, as petitioner argues, then his acts subsequent thereto and his formal statement made shortly before his death are entitled to equal weight as showing a changed intention, perhaps in accord with his statement to Westover that details of an arrangement with an American aviation company must be worked out by negotiation.

The last statement made by Fokker before his death was made in connection with securing a passport from the Dutch Consulate General in New York in preparation for a trip abroad. The evidence shows that this passport contained a statement over his signature that his domicile was Nyack, New York. Within four days decedent became unconscious and thereafter died without 1948 U.S. Tax Ct. LEXIS 140">*200 ever regaining consciousness. It is, therefore, his last formal statement as to where he considered his domicile to be. We think it is entitled to considerable weight in determining where decedent was domiciled at the date of death.

Other facts indicating that decedent did not intend to abandon his American domicile and establish a new domicile in Switzerland are his transfers to and his maintenance in this country of the greater portion of his estate, whereas he maintained in Switzerland only such household effects and furnishings as were deemed necessary for entertaining and business purposes.

10 T.C. 1225">*1252 In deciding that decedent was a resident of (domiciled in) the United States at the date of his death, we have sought to determine his intention as disclosed by his entire course of conduct, in accordance with the recognized tests prescribed by the decided cases, Texas v. Florida, 306 U.S. 398">306 U.S. 398; Sun Printing & Publishing Assn. v. Edwards, 194 U.S. 377">194 U.S. 377; Frederick Rodiek, Executor, 33 B. T. A. 1020; affd., 87 Fed. (2d) 328; Pietro Crespi, 44 B. T. A. 670,1948 U.S. Tax Ct. LEXIS 140">*201 and other cases cited by the petitioner. See also Walter J. Baer, 6 T.C. 1195, an income tax case. It must be admitted that there are some facts of record that conflict with our determination, but we are convinced that the weight of the evidence amply supports our conclusion. On this question of domicile, therefore, we affirm the respondent's determination.

The remaining question is the value to be determined for certain guilder assets located in Holland and Switzerland. The value in Dutch guilders of the various items involved is not in dispute. The question is, What rate of exchange shall be used in converting the Dutch guilders into American dollars? There would be no problem if the valuation could be made at the date of decedent's death. At that time the official rate of exchange was $ 0.531 per guilder. However, petitioner elected, as it had the legal right to do, to have the assets of the estate valued as of one year after decedent's death. In the interval between December 23, 1939, and December 23, 1940, many things happened to destroy values. Holland was invaded on May 10, 1940, and completely occupied by the German Army within a few1948 U.S. Tax Ct. LEXIS 140">*202 days. The occupation authorities blocked foreign transactions except as permitted by them. The Dutch Government in exile did likewise, and the United States issued an Executive Order prohibiting foreign exchange, transfer of credit, and the export of coin and currency except as specifically authorized by regulations or licenses issued by the Secretary of the Treasury.

As a result of the various decrees and orders, there was no official rate of exchange for Dutch guilders on December 23, 1940. The evidence shows that Tiffany was unable to convert Dutch guilders in a Swiss bank into Swiss francs which he would have been able to bring into this country. Various witnesses connected with New York banking and financial houses testified to the lack of a market in New York for blocked Dutch guilders. In a similar situation in a gift tax case involving blocked South African pounds, we fixed the amount of the gift as the value of the blocked pounds in this country, Morris Marks Landau, 7 T.C. 12. We think the same principle governs here, although we have an estate tax case. We have, therefore, fixed the value of the blocked Dutch guilders at 5 cents per1948 U.S. Tax Ct. LEXIS 140">*203 guilder, a value which is conceded by the petitioner.

10 T.C. 1225">*1253 Since the hearing in this case this Court has considered and decided an estate tax case involving the value of blocked British assets. Estate of Ambrose Fry, 9 T.C. 503. In that case it appeared that there was a lawful way in which a certain amount could be realized in the United States upon the British assets, and we held that the value to be included in the decedent's estate could not exceed the value that could be realized in the United States.

In view of the above authorities, we hold that the decedent's guilder assets, and administrative expenses stipulated in terms of guilders, should be converted at 5 cents per guilder. Decedent's estate tax liability should be recomputed in accordance with our determination of the disputed issues and the several stipulations of the parties.

Decision will be entered under Rule 50.