Cleveland daily leader. [volume] ([Cleveland, Ohio]) 1865-1873, 1865-10-27
TAXATION OF NATIONAL BANK
STOCK.
Important Decision of the New York
Court OfAPpeaIs.

In the case argued before the Court of
appeals, at its last sitting, of the city of
Utica against G. c. Churchill and others,
and Adam Van Allen against the assessors
of Albany; and C. P. Williams and others
against the same, the question Of the right
of the State and local authorities to tax
shareholders in the national banks was
fully considered. The decision of the
Court was given by Chief Justice DEMO,
all the other judges concurring, except
Mr.. Porter, who did not sit in the last case
on account of being a party interested.
Judge DEMO declares it incontestible
that property devoted TO public uses by
the Government cannot be subjected to
the taxing power of the governments of
the States of the Union. National insti-
buttons and establishments of every kind
brought into existence by laws constitu-
| t~ionaily enacted bv the National Legisla-
ture exist independently of the State gov
eminent, and cannot be made tributary by
means of State Jaws for taxation, or in any
/ other manner, to the needs or exigencies
| of the State governments. But the Bank
of the United States was, equally with the
| National banks now existing, Il trading
corporation. The individual means in
vested in the stock by the private stock
holders were, before such investment, the
proper and legitimate subjects OF State
taxation. There is no reason why they
should not be subjected to that liability
after being invested, unless the immunity
was necessary to the existence and preser-
Walton of the confederate body with which
they were connected. If liability to taxa
ton be sustained, it would appear that
the States may tax them out of existence,
but so long as the property thus invested
is only taxed in common with other lndl-
vidual property, as is done in the taxing
of lands of this State, the apprehension OF
such danger is purely f%anciful.
In the decision of the United States
Supreme Court, in the case of McCulloch
against the State of Maryland, the tax de
clared uncon- titutional, was upon the OPP
e~rations of the bank, an instrument en-
plOyed by the Government of the Union
to carry its power into effect, and did not
deprive the States of any revenues which
they originally possessed.
The proposition to draw all the proper
ty of the people of the Union invested in
banking, constituting a large proportion
of the personal property of the nation, tOI
the duty of contributing to support the
State Governments, whose sphere 1t Is to
enact and administer all the laws which
regulate the acquisition, enjoyment and
transmission of property and the admins
tration of Justice, and the conduct of State
and local governments would be frightful
to contemplate. The Court concludes
with entire confidence that there is nc
impediment to the taxation of these stock
holders arising out of the consideration
tnat banking corporations are not them
selves taxable.
The National Currency act expressly
authorizes the shares of these associations
to be included in the local amounts of tax
es imposed by State authority where the
banks are located; and such amount is moi
a taxing of the property on which the cap
ital of the bank has been invested. The
shareholders are not the owners of the
United States bonds held by the banks
The banking corporation, and not the
shareholders, its creditors, is entitled tC
the exception and therefore the Court
of Appeals s~ustains the action of the Su-
preme Court of the Fifth District, and re-
verses that of the Third District, and de-
clares that the shares held by the stock
holders in national banks are liable as
such to local taxation like other personal
property.