On the advice of his accountant the taxpayer used borrowed money to purchase £200,000 worth of silver, with a right to put the silver back to the vendor at a price of £210,000 within six months. Although the motivation of the taxpayer in making this purchase (and a similar purchase made three months previously) was to hedge his assets (worth between £150,000 and £200,000) against a devaluation of the pound, in fact such a devaluation did not materialize within the relevant period, and the price of silver rose significantly for unrelated reasons.
In affirming the Commissioners' finding that the taxpayer on closing out his position had realized a gain from "an adventure in the nature of trade", Harman L.J. stated:
"It was expected that there would be devaluation, and the reason for wanting to make a profit was that there would be a loss on devaluation; but that does not make any difference, it seems to me, to the fact that the motive and object of the whole transaction was to buy on a short-term basis a commodity with a view to its resale at a profit."