Maddest, Judge,
delivered the opinion of the court:
The plaintiff sues for $73,594.71 plus interest thereon which, it says, should have been but was not reimbursed to it when it was paid for a cost plus fixed fee contract with the Government. The amount in question was paid by the plaintiff to the Commonwealth of Pennsylvania pursuant to the provisions of the Pennsylvania Capital Stock Tax Act of June 7,1879, as amended.
The plaintiff was, during the years of the performance of the contract here in question, a Pennsylvania corporation, with its executive offices in Pittsburgh and two manufacturing plants, one in Pennsylvania and one in Illinois. In 1941 the plaintiff made a contract with the Government to manufacture 900 Medium Tanks, M-4. The contract was, in succeeding years, amended and supplemented and performance continued until December 31,1945. The plaintiff produced, in all, 10,000 tanks. The contract contemplated performance in, and was in fact performed in, the plaintiff’s Illinois plant.
As we have said, the contract was a cost plus fixed fee contract. It contained voluminous provisions as to what costs should, and what should not, be reimbursable by the Government. None of the provisions, affirmative or negative, was plainly applicable to the Pennsylvania Capital Stock Tax here in question. Our task is, then, to construe such particular provisions as were written in the contract, and the contract as a whole, to determine whether the tax was reimbursable.
The pertinent provisions of the contract relating to reimbursement appear in our findings 6 and 7. In Title IV, Article IV 1 (a) (1) headed “General rule” it is said that—
the proper proportion of any indirect costs (including therein a reasonable proportion of management expenses) incident to and necessary for the performance of this contract
is reimbursable. Under Article IV 1 (a) (7) headed “Expenses of distribution, servicing and administration” it is provided that, inter alia, the cost of “the general adminis[320]*320tration of the business, such as” a list of named kinds of expenses, one item of the list being “other expenses” is reimbursable. Article IV 1 (a) (9) and its subdivision c provided for the allocation of administrative expenses in the proportion which the direct cost of the contract work bears to the direct cost of all of the contractor’s work. The provisions referred to above are, of course, orthodox provisions for cost accounting.
The Pennsylvania Capital Stock Tax, the reimbursability of which is here in question, is based primarily upon the value, not of the corporation’s assets, but of its capital stock. That value is its selling price at the end of the tax year, provided that such value is not less than its average selling price during the year, not less than the value which it should have had in view of its earnings for the year, and not less than the stock value indicated by the intrinsic value of its tangible property and assets, its good will, its franchises and privileges “as indicated by the material results of their exercise” taking into account also the amount of the corporation’s indebtedness. We have reproduced the statute in finding 11.
In Commonwealth v. Union Shipbuilding Co., 211 Pa. 403, the Supreme Court of Pennsylvania held that when a corporation had manufacturing plants in Pennsylvania and in Maryland, it was proper for the Pennsylvania taxing authorities to apportion the total value of the corporation’s stock between the value of the assets of the corporation in Pennsylvania and those in Maryland, and assess the Pennsylvania tax against only the Pennsylvania proportion of the whole value of the capital stock. The tax in question in the instant case was assessed and paid on that basis. That would mean, roughly, that, to the extent that the profits made by the Illinois operation were proportionate to the physical assets in Illinois, the effect of those profits in setting the market price of the corporation’s stock, and hence its value for tax purposes, would be eliminated in determining the amount of the Pennsylvania tax.
The Pennsylvania Capital Stock Tax paid by the plaintiff was, then, based roughly upon that part of the market value of the corporation’s stock which was created by the profits [321]*321made by the operations of the coi'poration’s plant in Pennsylvania and the value of the physical assets of its plant in Pennsylvania. The corporation’s rented office space in the Koppers Building in Pittsburgh, and the furnishings of the office, would have little effect upon the value of its stock. Any money of the corporation in Pennsylvania banks, or securities owned in Pennsylvania might have affected the market value of the stock.
The Pennsylvania plant of the plaintiff, and the profits made by the operation of that plant, and money or securities owned by the plaintiff in Pennsylvania had no relation to the performance of the plaintiff’s contract with the Government, or the cost of that performance. It is not conceivable that if the parties, in negotiating the terms of the contract, had put their minds upon the question which faces us here, and had analyzed the nature and operation of the Pennsylvania Capital Stock Tax, they would have agreed that it should be a reimbursable cost of the performance of the Illinois contract. The language of the contract is, at best, barely susceptible of an interpretation which would include this tax as a reimbursable cost. We should not so interpret if as to make a contract for the parties which, we are satisfied, they would not knowingly have made for themselves.
The plaintiff urges that the tax was of the nature of a franchise tax, the payment of which was necessary to preserve the plaintiff’s corporate existence. The tax statute does not so indicate. It would seem that the effect of nonpayment would be the same as the effect which non-payment of any other tax would have. As early as 1882 the Supreme Court of Pennsylvania held that the Capital Stock Tax is a tax upon the property and assets of the corporation, although the value of the capital and assets is arrived at by ascertaining the value of the capital stock. Commonwealth v. Standard Oil Co., 101 Pa. 119, 145. It is not a franchise tax.
The plaintiff is not entitled to recover and its petition will be dismissed.
It is so ordered.
Seed, Justice (Bet.), sitting by designation; Whitaker, Judge; LittletoN, Judge; and JoNes, Chief Judge, concur.
[322]*322FINDINGS OF FACT
The court, having considered the evidence, the report of Commissioner Paul H. McMurray, and the briefs and argument of counsel, makes findings of fact as follows:
1. Plaintiff, Pressed Steel Car Company, Inc., was, during the period from December 1, 1941, to December 31, 1945, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, and had its principal executive office at 2500 Koppers Building, Pittsburgh, Pennsylvania, and its two manufacturing plants at McKees Kocks, Neville Island, near Pittsburgh, Pennsylvania, and Hegewisch, Chicago, Illinois, respectively.
In the course of successive mergers with wholly-owned subsidiaries, plaintiff, as the surviving corporation in the case of such mergers, has become a corporation organized and existing under the laws of the State of Delaware and has changed its name to and now is known as “U. S. Industries, Inc.”
2. On or about August 21,1941, defendant transmitted to plaintiff a “letter of intent” with respect to an order to be placed by defendant with plaintiff for the supplying by plaintiff of 900 Medium Tanks, M-4. The terms of such letter of intent were accepted by plaintiff under date of August 13,1941.
Pursuant to the letter of intent, plaintiff and defendant executed the written contract on November 12, 1941. The contract was approved on behalf of the Secretary of War December 17,1941.
3. Following receipt of the letter of intent, plaintiff commenced performance of the work contemplated and also rehabilitated its Hegewisch Plant for the production of the materiel covered by the proposed contract, trained personnel, and proceeded to produce the material which would be needed.
After formal approval of the original contract performance continued under its terms, as amended and supplemented, until December 31, 1945, during which period of time some 10,000 vehicles were produced.
[323]*3234. Amendments and supplements to the contract were in writing and designated Supplements Nos. 1 to 107, inclusive. Supplements 1 to 103 and 105 to 107 provided in substance for the production of materiel additional to that originally covered by the contract, made changes (1) in quantities of materiel to be produced, (2) in estimated costs and (3) with respect to various other aspects of the contract. These changes are not material to the claim in issue in this proceeding. Such supplements do not contain provisions affecting the obligation of defendant under the contract to reimburse the plaintiff for the cost of performance of the contract, as amended and supplemented.
5. The contract as amended was what is commonly known as a “cost-plus-a-fixed-fee contract.” It provided in general for the performance of the work by plaintiff, that defendant would reimburse plaintiff for costs incurred in such performance and that defendant would pay plaintiff a fixed fee per unit of production. A separate fixed fee of $1 was provided as compensation for services performed by plaintiff in connection with the rehabilitation and equipping of plaintiff’s Hegewisch Plant where production under the contract was to take place.
6. Article IV-A of Title IV of the contract deals, in pertinent part, with the subject of costs to be reimbursed by defendant, as follows:
Title IV
Cost of the Work UNder Titles I and III
ARTICLE IV — REIMBURSEMENT FOR COSTS
1. The Contractor shall be reimbursed in the manner hereinafter described for its costs and in the performance of the work under TITLES I and III hereof, as approved or ratified by the Contracting Officer, determined in accordance with the following provisions: ■
fa) Cost of performing this contract.
(1) General rule. — The cost of performing this contract shall be the sum of the direct costs including therein expenditures for materials, direct labor and direct expenses incurred by the Contractor in performing this contract; and the proper proportion of any indirect costs (including herein a reasonable proportion of manage[324]*324ment expenses) incident to and necessary for tlie performance of this contract.
(2) Elements of cost. — In general, the elements of cost may be defined for purposes of this contract as follows:
a. Manufacturing cost, which is the sum of factory cost (see paragraph (3) of this section) and other manufacturing cost (see paragraph (4) of this section);
b. Miscellaneous direct expenses (see paragraph (5) of this section);
c. General expenses, which are the sum of indirect engineering expenses, usually termed “engineer-overhead” (see paragraph (6) of this section) and expenses of distribution, servicing and administration (see Paragraph (7) of this section).
(3) Factory cost. — Factory cost is the sum of the following:
* * H* Ü*
/. Indirect factory expenses. — Items usually termed “factory overhead”, which are not directly chargeable to the factory cost of performing this contract but which are properly incident to and necessary for the performance of this contract and consist of the following: *****
iv. Fixed charges and obsolescence. — The prorata share of recurring charges with respect to property used for manufacturing purposes of this contract, such as premiums for fire and elevator insurance, property taxes, rentals and allowances for depreciation of such property. *****
(4) Other manufacturing cost. — Other manufacturing cost as used in paragraph (2) of this section includes items of manufacturing cost which are not properly or satisfactorily chargeable to factory cost (see paragraph (3) of this section) but which upon a complete showing of all pertinent facts are properly to be included as a cost of performing this contract.
* if: % * #
(7) Expenses of distribution, servicing and administration. — Expenses of distribution, servicing and administration, which are treated in this section as a part of general expenses in determining the cost of performing this contract (see paragraph (2) of this section), comprehend the expenses incident to and necessary for the performance of this contract, which are incurred in connection with the distribution and general servicing of the Contractor’s products and the general administration of the business, such as—
[325]*325a. Compensation for personal services of employees. * * *.
b. Bidding and general selling expenses. * * *.
c. General servicing expense. * * *.
d. Other expenses. * * *.
j Í $
ii. Allowances for interest on invested capital are not allowable as costs of performing this contract.
iii. Among the items which shall not be included as a part of the cost of performing this contract or considered in determining such cost, are the following:
❖
Federal and State income and excess profits taxes and surtaxes; * *
$ ‡ $
(9) Allocation of indirect costs. — No general rule applicable to all cases may be stated for ascertaining the proper proportion of the indirect cost to be allocated to the cost of performing this contract. Such proper proportion depends upon all the facts and circumstances relating to the performance of this contract. Subject to a requirement that all items which have no relation to the performance of this contract shall be eliminated from the amount to be allocated, the following methods of allocation are outlined as acceptable:
$ $ $ $ $
c. Administrative expenses (or “overhead”). — The allowable expenses of administration (see paragraph (7) of this section) or other general expenses except indirect engineering expenses, bidding and general selling expenses, and general, servicing expenses shall ordinarily be allocated or distributed to the cost of performing this contract on the basis of the proportion which the manufacturing cost (see paragraph (2) of this section) attributable to this contract bears to the total manufacturing cost during the period within which this contract is performed.
* * * * *
(10) Such other items, not enumerated above, whether of a similar or dissimilar nature, which in the opinion of the Contracting Officer are properly chargeable to the cost of the work under this contract. When such item is allowed by the Contracting Officer, it shall be specifically certified as being allowed under this paragraph.
7. In this contract there are only three express provisions relating to taxes. They áre the provisions for the reimburs-[326]*326ability (1) of “property taxes” as recurring charges with respect to property used for manufacturing purposes; (2) “payments to unemployment, old age and social security, Federal and State funds” as miscellaneous indirect factory expenses and (3) for the nonreimbursability as distribution, servicing and administration expenses of “Federal and State income and excise profit taxes and surtaxes” and “taxes and expenses on issues and transfers of capital stock”.
8. There is no specific provision in the contract as originally drawn for the reimbursability of Pennsylvania Capital Stock Taxes by name or description and there is no specific mention of, or reference to, the Pennsylvania Capital Stock Tax anywhere in the original contract.
9. As of November 27, 1946, plaintiff and defendant entered into Supplemental Settlement Agreement No. 104, providing for the settlement of all controversies which had arisen under the contract except for the matter involved in this litigation.
With respect to the matter involved in this litigation, Supplement 104 provided as follows:
SUPPLEMENTAL SETTLEMENT AGREEMENT NO. 104
ijt
Article 3. (a) * * *
(b) In addition, upon execution of this Agreement, the Government agrees to pay to the Contractor the sum of $73,161.48, representing the sum of $7,314,301.48, less the sum of $7,241,140.00, representing all unliqui-dated partial or progressive payments previously made on account to the Contractor or its assignee and all unliquidated advance payments (with interest, if any, thereon). All applicable property disposal credits have been previously paid to or credited to the Government by the Contractor. All interest to which the Contractor is entitled under the Act to the date of payment is included in said sum of $73,161.48, or, to the extent not so included, is expressly waived by this Agreement. Said sum, together with all other sums heretofore paid, constitutes payment in full and complete settlement of the amount due the Contractor by reason of the termination of work, or otherwise, under the Contract and of all other claims of the Contractor under the Contract and under the Act, in so far as it pertains to the Contract, [327]*327except as hereinafter provided in this Article and in Article 4.
(e) Upon payment of said sum of $73,161.48 as aforesaid, all rights and liabilities of the parties under the Contract and under the Act, in so far as it pertains to the Contract, shall cease forthwith and be forever released except:
* * * ❖ H*
(11) All rights and obligations of the parties, if any, with respect to the Pennsylvania Capital Stock Tax, not to exceed $73,594.71, which item is subject to a ruling by the Comptroller General. Payment to the Contractor will be subject to the ruling of the Comptroller General.
10. It appears that Supplement 104 contained the above quoted provision with respect to plaintiff’s claim for reimbursement for a portion of the Pennsylvania Capital Stock Taxes because at the time of the execution of this supplement that item was still in dispute. All other questions were settled between the parties and Supplement 104 reflected their agreement. Neither plaintiff nor defendant was willing to recede from its position with respect to the item of Pennsylvania Capital Stock Taxes but they did agree on a method of settling the item, namely, by referring it to the Comptroller General.
11. The Pennsylvania Capital Stock Tax Act of June 7, 1879, as amended, and in force in Pennsylvania during the years of the performance of this contract, 1941-1945, is as follows:
Section 20. That hereafter, except in the case of corporations of the first class, nonprofit corporations, and cooperative agricultural associations not having capital stock and not conducted for profit, banks, savings institutions, title insurance, or trust companies, building and loan associations, and foreign insurance companies, it shall be the duty of every corporation having capital stock, every joint-stock association, limited partnership, and every company whatsoever, now or hereafter organized or incorporated by or under any laws of this Commonwealth, and of every corporation, joint-stock association, limited partnership and company whatsoever, now or hereafter incorporated or organized by or under the law of any other State or Territory of the United States, or by the United States, or by any foreign [328]*328government, and doing business in and liable to taxation within this Commonwealth, or having capital or property employed or used in this Commonwealth by or in the name of any limited partnership or joint-stock association, company or corporation whatsoever, association or associationSj copartnership or copartnerships, person or persons, or m any other manner, to make annually on or before the fifteenth day of March, for the calendar year next preceding, a report in writing to the Department of Revenue on a form or forms to be prescribed and furnished by it, setting forth, in addition to any other information required by the Department of Revenue:
First. The amount of its capital stock at the close of the year for which report is made, together with the highest selling price per share, and the average selling price thereof during said year.
Second. Its debt account.
Third. Its income account, together with the disposition of any net income, and its profit and loss statement.
Fourth. Its general balance sheet.
Fifth. Its real estate and tangible personal property, if any, owned and permanently located outside of the Commonwealth and value of the same; and the value of the property, if any, exempt from taxation.
Sixth. A valuation and appraisal, in the manner hereinafter provided, of the capital stock of the said corporation, company, joint-stock association, or limited partnership, at its actual value in cash as it existed at the close of the year for which the report is made.
The affidavit of two of the officers of such corporation, limited partnership, joint-stock association or company, shall be attached to said report. Such affidavit shall be in the form required by the Department of Revenue, but shall state, in addition to any other averments required by the department, that, with fidelity and according to the best of their knowledge and belief, the affiants have estimated, valued and appraised, as shown in said report, the capital stock of the said corporation at its actual value in cash as it existed at the close of the year for which report is made; not less, however, than, first, the average which said stock sold for during the year; and second, not less than the price or value indicated or measured by net earnings or by the amount of profit made and either declared in dividends, expended in bet-terments, or carried into the surplus or sinking fund; and third, not less than the actual value indicated or measured by consideration of the intrinsic value of its tangible [329]*329property and assets, and of the value of its good will and franchises and privileges, as indicated by the material results of their, exercise, taking also into consideration the amount of its indebtedness.
The time for filing reports may be extended; taxpayers may be permitted to file their reports on a fiscal year basis; the procedure in case the Department of Revenue is not satisfied with the appraisement made by the officers of the taxpayer, and the penalties for failing to file reports and pay taxes shall be as prescribed by law.
SectioN 21. (a) That every domestic corporation, other than corporations of the first class, nonprofit corporation, and cooperative agricultural associations not having capital stock and not conducted for profit, and every joint-stock association, limited partnership, and company whatsoever, from which a report is required under the twentieth section hereof, shall be subject to, and pay into the Treasury of the Commonwealth annually, through the Department of Revenue, a tax at the rate of five mills upon each dollar of the actual value of its whole capital stock of all kinds, including common, special, and preferred, as ascertained in the manner prescribed in said twentieth section.
12. Plaintiff’s officers and attorneys were cognizant of the Pennsylvania Capital Stock Tax from the time of plaintiff’s organization in 1936 and were familiar with the manner in which it had been imposed and was to be determined and computed. They were also aware of the fact that the corporation was permitted and required by the statute to declare the value of its capital stock as the basis for the capital stock tax for one-year periods at the rate specified.
13. The contracting officer, then Col. Donald Armstrong, was familiar with the policy of the defendant to keep costs of the performance of contracts as low as possible. He was instrumental in eliminating the Illinois sales tax before the contract was signed, and in limiting the cost of administrative salaries, travel, and communication, particularly long distance telephone calls.
Plaintiff checked the proposed contract with respect to the reimbursability of costs and insisted upon, and obtained, from defendant’s contracting and negotiating officers, the elimination of a provision which states that extraordinary expenses due to strikes or lockouts were not reimbursable.
[330]*330On November 7, 1941, the final draft of the contract was sent to plaintiff’s lawyer, Mr. C. M. Thorp, Jr. by defendant. He was asked to examine it and, if he had any further suggestions, to communicate with defendant’s legal officers by wire or telephone. No further suggestions were received by defendant prior to execution of the contract.
14. The contract was executed in Chicago, Illinois, on November 12, 1941 by Col. Donald Armstrong, contracting officer for defendant, and by Mr. J. F. MacEnulty, president of plaintiff’s corporation, and bears the signature of plaintiff’s attorney, C. M. Thorp, Jr., as witness. The executed contract was in final form and approval, without change, was accomplished on December 17,1941 by the Under Secretary of War.
15. During the period of time, August 2,1941, to August 31, 1942, during which defendant’s contracting officer, Col. Donald Armstrong, and the members of his legal staff were in charge of the negotiations for the execution and the performance of the contract, the plaintiff, through its officers and attorney, who were dealing with defendant’s officers, made no specific reference to Pennsylvania Capital Stock Taxes or the subject of reimbursability of such taxes.
16. In reports covering Pennsylvania Capital Stock Tax for 1941-1945 inclusive, plaintiff accounted for property and monies received from defendant relating to the contract in suit and in which plaintiff valued its capital stock upon its net earnings or profits principally derived from defendant upon the contract in suit and upon the value of its tangible property and assets, including those received by it from defendant at its Illinois plant and used there. The Pennsylvania Capital Stock Tax, measured by these values, was computed and paid. It does not appear that plaintiff consulted with defendant in arriving at any of the computations of its capital stock taxes for the years above mentioned, which involves a portion of the tax which plaintiff now seeks to recover.
17. Prior to January 25, 1944, and after two full years of its operation of its Hegewisch plant under the contract in suit, plaintiff did not know whether the Pennsylvania Capital Stock Tax could properly be allocated to the cost of the oper[331]*331ation in Illinois. A discussion in December 1943, had been had between fiscal representatives of plaintiff and defendant at Chicago, about percentage bases for allocating executive salaries to general and administrative expenses. On January 25, 1944, plaintiff’s lawyers in a letter to their client admitted that (1) the earnings of the Illinois plant and (2) corporate dividends solely resulting therefrom were factors in measuring the taxable value of plaintiff’s capital stock, to such extent that, even if plaintiff had no property in Pennsylvania, it would still have to pay the tax in Pennsylvania as measured by those two factors. The rehabilitation of the Illinois plant was financed wholly with Government money and the Illinois plant tools and equipment were Government owned. In their letter plaintiff’s lawyers stated their opinion that the capital stock tax was not a property tax but was a “franchise” tax.
18. The State of Pennsylvania had in operation from May 16, 1935 a franchise tax, to which plaintiff was subject, separate and apart from the capital stock tax.
19. Plaintiff in the late winter, or early spring of 1944, submitted to defendant, for the first time, varying amounts of the Pennsylvania Capital Stock Tax as a part of its general and administrative expenses for 1942 and 1943, allocated to the contract on various suggested bases, and enclosed in support a copy of a legal opinion from its attorney dated January 25,1944.
The Judge Advocate General of the Army and the Legal Branch of Office of Chief of Ordnance rejected plaintiff’s proposals on the ground that due to the nature of the tax in relation to the performance of the contract in Illinois, the tax was not a reimbursable item on any basis of allocation. On September 5, 1944 plaintiff was so advised and told by defendant that, if plaintiff wished to pursue the matter of the tax reimbursability further, it would have to submit a formal public voucher.
Negotiations then commenced between H. J. Gearhart, plaintiff’s treasurer, and Capt. Robert D. Hummer, the contracting officer’s representative for defendant, with respect to general and administrative expenses to be allocated to the contract, with the result that, under date of December 27, [332]*3321944, specified allocable percentages of executive salaries were agreed upon and items of admissible general and administrative expense were to be allocated to tbe contract on the basis of the ratio of the Hegewisch direct labor and factory overhead to plaintiff’s total and direct labor and factory overhead excluding from such factory overhead general and administrative expense. It was then mutually agreed “that the amount of Federal and State capital stock taxes chargeable against this contract shall be handled as a separate matter.”
20. The public voucher for the allocated portion of the Pennsylvania Capital Stock Tax of $73,594.11 was sent to the office of the Chicago Ordnance District where the amount claimed was reduced to $71,497.64, by eliminating termination charges. The contracting officer’s representative in Chicago, Major Hummer, signed the certificate for goods received or services performed in the printed form as approved for $71,497.64. Major Hummer’s signature meant that the contracting officer’s representative had found that the Pennsylvania Capital Stock Tax had been paid and that the allocation involved was fair and reasonable.
Lee M. Thurston was the contracting officer. Plaintiff addressed the voucher to the Comptroller General. He knew that the Chief of Ordnance had previously ruled that the Pennsylvania Capital Stock Tax was not reimbursable.
21. The public voucher was transmitted some time after June 1946 to the Office of Chief of Ordnance in Washington, D. C., for submission to the Comptroller General.
Pending a review of the voucher by the Office of Chief of Ordnance, plaintiff and defendant entered into further discussions with respect to the exclusion from the termination settlement of the items of the Pennsylvania Capital Stock Tax and two items of general and administrative expenses, resulting in an agreement known as Supplement 104 to the contract which provided for a further payment by defendant to plaintiff of $73,161.48 in liquidation of all un-liquidated payments, interest, and other claims of plaintiff under the contract and under the Contract Settlement Act, except for plaintiff’s claim of $73,594.71 with respect to the [333]*333Pennsylvania Capital Stock Tax, which, item was stated to be “subject to a ruling by the Comptroller General” and that payment to the plaintiff would be “subject to the ruling of the Comptroller General.”
22. On September 26, 1946, the Comptroller General published an opinion known as the McLctrren decision in which he returned to the War Department without decision a reimbursement public voucher under a cost-plus-fixed-fee contract for the stated reason that, the contract having been terminated, there was no provision in the Contract Settlement Act or the Joint Termination Eegulations for presentation of such (reclaim) voucher to the General Accounting Office. The officers of the Office of Chief of Ordnance concluded that the McLarren decision foreclosed submission to the Comptroller General of claim (or reclaim) vouchers on excepted items from joint termination settlements, including plaintiff’s public voucher of June 27, 1946. Consequently the Office of Chief of Ordnance in Washington returned plaintiff’s public voucher to the Chicago Ordnance District for final decision by the contracting officer. In returning the public voucher to the Chicago Ordnance District, the Office of Chief of Ordnance in Washington stated in effect that such office was of the opinion that the claim should be denied.
23. Having had the matter under consideration since on or about October 8, 1947, the contracting officer, Lee M. Thurston, under date of February 9, 1948, made his finding and decision by letter sent by registered mail to the plaintiff corporation, as follows:
GeNtlemeN : Pursuant to the Contract Settlement Act and the appropriate provisions of the Joint Termination Eegulations, the Contracting Officer herewith makes the following determinations and findings with reference to reimbursement for Pennsylvania Capital Stock Tax under the provisions of Title IV, Article IV-A of the subject cost-plus-a-fixed-fee contract, in an amount of $73,594.71 — such amount being the percentage of such tax claimed to be applicable to United States contracts.
Supplemental Agreement No. 104, providing for the termination of subject contract, excepted from such ter-[334]*334ruination “All rights and obligations of the parties, if any, with respect to the Pennsylvania Capital Stock Tax, not to exceed $73,594.71, which item is subject to a ruling by the Comptroller General. Payment to the Contractor will be subject to the ruling of the Comptroller General”. Inasmuch as this item was excluded from the final settlement agreement, the Comptroller General has ruled that all such items are for the determination by the Contracting Officer and the Comptroller General has no jurisdiction in such matters.
Pursuant to the above, the Contracting Officer herewith finds that the contractor is not entitled to any reimbursement for the payment of the Pennsylvania Capital Stock Tax. In support of such unilateral determination, the undersigned, Contracting Officer makes the following findings:
1. Article IV-A of Title IV of subject contract provides for the type of costs subject to reimbursement. Provisions relied upon by contractor as justifying reimbursement and other provisions pertinent to the reimbursability or non-reimbursability of the item in question are as follows:
[The letter cites and quotes in full Article IV-A 1 (a) (3) d and / iv and v: Art. IV-A 1 (a) (4), (7) d iii and (9);]
❖ * * * *
2. * * * In all of such provisions the common factor of applicability is based on the cost being incident to, necessary in, and used for the performing of this contract. This criteria is clearly set forth as being the controlling element in reimbursement of costs under the said contract.
3. Article IV-A l.(a) (7) d iii, in setting up items not compensable under this contract, lists various items of expenditures ordinarily incurred in the operation of a business which, however, are not to be considered reimbursable under the cost-plus-a-fixed-fee contract. This indicates that not all general expenditures are considered as being allocable to the performance of such contract. In addition, Article IV-A 1. (a) (9) specifically excepts from the allocation of direct costs “all items which have no relation to the performance of this contract”. Basically, therefore, the contract provides for reimbursement for all expenditures incurred in aid of the performance of this contract, and excepts general expenditures chargeable to the business as a [335]*335whole but which, served no function in specifically promoting the purposes of this contract.
4. In this instance the Capital. Stock Tax is assessed against the contractor as an incident to being located in the Commonwealth of Pennsylvania. While the principal office and other operating plants of the contractor are located there, the Hegewisch plant in the State of Illinois was the plant designated as the place where work under subject contract was performed. Inasmuch as the work was done outside of the taxing jurisdiction, the Pennsylvania Capital Stock Tax cannot be considered as being a charge allocable to this contract as being necessarily incident to the performance of such contract.
5. Article IY-A 1. (a) (9) as set forth above states that a determination of the allocation of indirect costs depends upon all the facts and circumstances relating to the performance of the contract and is subject to the requirement that all items which have no relation to the performance of this contract shall be eliminated.
In view of the above it is the finding of the Contracting Officer that the item of Pennsylvania Capital Stock Tax has no relation to the performance of this contract, and inasmuch as the said tax is not reimbursable as a property tax, not being incident to the property used for manufacturing purposes of this contract, claim for reimbursement under the provisions of Title IY of subject contract in the sum of $13,594.71 is denied.
In the event you are dissatisfied with the foregoing findings and the unilateral determination herein made, you may appeal from such findings and decision of the Contracting Officer in accordance with the provisions for such appeal contained in Section 13 (a) of the Contract Settlement Act and Section 755 of the Joint Termination Regulations.
Plaintiff filed no appeal from the contracting officer’s findings and decision.
24. Plaintiff took Federal income tax deductions for the Pennsylvania Capital Stock Taxes it paid to the Commonwealth of Pennsylvania for the years 1942, 1943, 1944, and 1945; the amounts of such deductions finally allowed by the United States Treasury Department are the amounts with additional assessments as actually paid to the Commonwealth of Pennsylvania; and they include the amounts totaling [336]*336$73,594.71 claimed by plaintiff in its public voucher dated June 27, 1946, in Supplement 104 dated November 27, 1946 and in its petition.
25. For the taxable years 1942 to 1945, inclusive, plaintiff, as it was required to do by the Pennsylvania taxing statute, paid to the Commonwealth of Pennsylvania the following capital stock taxes:
Initial payments Additional assessments Total payments
1942. $35,080.13 $4,385.02 $39,465.15
1943.. 36,102.16 36,102.15
1944.. 31,217.61 12,140.18 43,367.79
1945. 34,027.02 19,140.20 53,167.22
26. The amount of the item in dispute in this suit was computed by applying to the amounts of taxes paid initially as shown in Finding 25 (Column A) above with respect to the years 1943, 1944 and 1945 and the amount of $39,465.15, the total of the payments made with respect to the year 1942 (Column C), the allocating percentages derived from the ratio of the total of Armored Tank Division direct labor and factory overhead to the total of all direct labor and factory overhead incurred in all of plaintiff’s operations. The following shows the computation:
1942 — 39.35% X?39,465.15=$15, 529. 54
1943 — 58.717% X $36,102.15=$21,195. 58
1944 — 62.45% X$31,217. 61=$19, 485.39
1945 — 51. 06% X$34, 027.02=$17,374.20
Total_ $73,594.71
Although the Department of Revenue of the Commonwealth of Pennsylvania later increased the amounts of the plaintiff’s capital stock tax, the plaintiff, under Supplement 104, agreed to limit its claims with respect to reimbursement of Pennsylvania Capital Stock Taxes to $73,594.71 and, in this proceeding, makes no claim for reimbursement of any portion of such taxes paid in excess of that amount.
[337]*33727. Personnel in the office of the Chief of Ordnance who were familiar with the MeLarren decision felt that the transmittal of plaintiff’s public voucher to the Comptroller General would be of no avail since, in their opinion, the Comptroller General would return it without issuing any ruling other than to state he had no jurisdiction. Accordingly, the public voucher was returned to the originating installation, the Chicago Ordnance District, and never submitted to the Comptroller General.
28. It was plaintiff’s understanding, as indicated in paragraph 11 of the petition, that the Comptroller General of the United States had actually refused to rule on its claim and plaintiff was unaware that the claim had never been submitted to the Comptroller General.
At a pre-trial conference held under date of August 12, 1954, it was brought to the attention of plaintiff for the first time that its claim had not been submitted to the Comptroller General for a ruling. At that point it was agreed that an attempt would be made to obtain a ruling on the claim from the Comptroller General. This proposal was acceptable to both plaintiff and defendant as it would, if successful, effectively dispose of this proceeding. Accordingly, on October 2, 1954, plaintiff, through its counsel, submitted its . claim again to the office of the Chief of Ordnance. On December 23, 1954, such claim was transmitted by Robert T. Stevens, Secretary of the Army, to the Comptroller General with a request that an advance decision be made thereon. On February 11, 1955, Frank H. Weitzel, Assistant Comptroller General, advised Mr. Stevens by letter that the request for a decision under the terms of article 11 of Supplement 104 was “declined”. The case then proceeded to trial.
29. The Capital Stock Tax imposed by the State of Pennsylvania on plaintiff during the years 1942 to 1945, both inclusive, is a tax levied upon each business incorporated under the laws of such state, and certain other similar business organizations, at the rate of five mills upon each dollar of the actual value of its whole capital stock. The actual value of' the stock is ascertained in accordance with a method set forth [338]*338in the taxing statute. Such statute provides that the actual value in cash of the capital stock as it existed at the close of the taxable year is to be appraised by two officers of the corporation but that such appraised value shall not be less than (a) the average selling price of such stock during such year, (b) the price or value indicated by the net earnings or the amount of profit made, or (c) the value indicated by the intrinsic value of its tangible property and assets and of its good will, franchise and privileges, taking into consideration the amount of indebtedness of the corporation. The taxing statute provides exemptions for the value of property owned, directly or indirectly, by the corporation and located outside the Commonwealth, and directs that so much of the value of such out-of-state property shall be exempted or relieved from the capital stock tax in the proportion which the value of such out-of-state assets bears to the value of the total assets owned by the corporation.
30. The Supreme Court of Pennsylvania has held that the tax is a tax on the property and assets of the corporation at a value based on the value of the capital stock rather than upon the specific asset values of the property taxed: Commonwealth of Pennsylvania, v. Standard Oil Company, 101 Pa. 119 (1882).
The tax applies only to domestic corporations (i. e., those incorporated in Pennsylvania) and such other domestic organizations as have characteristics similar to those of a corporation, such as joint stock associations, limited partnerships and companies. Section 1704 of the Fiscal Code of the Commonwealth of Pennsylvania (Act of April 9, 1929, P. L. 343, Article XVII, Section 1704; as amended) authorizes the Governor of Pennsylvania to forfeit the charter of a domestic corporation which does not comply with the reporting requirements of various tax statutes of the State.
31. Plaintiff’s books were maintained in accordance with the accrual system of accounting. The resettlement as to 1942 was made in 1945 and the resettlements as to 1943,1944 and 1945 were made in 1949.
32. The plaintiff insists that the Pennsylvania Capital Stock Taxes which were incurred for the years 1942 to 1945, [339]*339inclusive, to tbe extent of tbe proportion thereof computed, on tbe basis of tbe allocating percentages specified in Finding 26 (but not exceeding an aggregate amount of $73,594.71), were (1) reimbursable to plaintiff by defendant pursuant to either Article IV-A 1 (a) (3) /. iv. as a pro rata share of recurring charges with respect to property used for manufacturing purposes of the contract, such as property taxes, or (2) pursuant to Article IV-A 1 (a) (1) (7) as a reasonable proportion of management expenses, i. e., “overhead” expenses incurred in connection with the general administration of the business in accordance with the provisions of Article IV-A 1 (a) (9) o.
33. Under the system of accounting used by plaintiff in the keeping of its books of account, the Pennsylvania Capital Stock Taxes here involved were recorded on its books, maintained at its Pittsburgh office, as general and administrative expense. Witnesses who testified on the subject were not familiar with any other method of recording such taxes and considered this manner of treating such taxes as proper.
Plaintiff, in submitting its invoices for reimbursement of a proportionate amount of Pennsylvania Capital Stock Taxes was acting in accordance with a procedure suggested on behalf of defendant.
34. The War Department in TM-14-1000, dated September 1, 1945, authorized changes in Administrative Audit Procedures for Cost-Plus-A-Fixed-Fee Supply Contracts as follows:
266. State franchise taxes levied for the privilege of doing business, including those computed on a net income base, are reimbursable costs under CPFF contracts. However, state income and excess profits taxes are not reimbursable costs.
267. The tax will be prorated in equal amounts per month over the period to which the privilege applies, namely, the privilege year. When it is necessary to allocate a franchise tax between CPFF contracts and other work, the basis for the allocation of general administrative expenses will be used.
268. Taxes imposed by the following states and statutes have been classified below as (1) franchise taxes which are reimbursable as costs and (2) income and excess profits taxes which are not reimbursable:
[340]*340List of States (mid statutes imposing (1) Reimbursable franchise tames and (2) Nonreimbursable income and emcess profits tames
State Reimbursable Not reimbursable Statute
Pennsylvania-Corporate Net Income (Franchise) Tax Act. Purdon’s Pennsylvania Statutes, Title 721 Oh. 2, Secs. 3420a-3420n.
Purdon’s Pennsylvania Statutes, Title 72, Ch. 2, Sec. 1871 et seq.
CONCLUSION OF LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is not entitled to recover, and the petition is therefore dismissed.