Evansville daily journal. (Evansville, Ind.) 1863-1866, 1865-10-02
An ImnortanE 0neafIon.

In those bonds. Already several impcr-
tant issues have been made between
those who are in favor Of taxing stocks
consisting OF Government bonds, and
those opposed TO the same, and the most
eminent lawyers appear to disagree as TO
what 10 law and equity in the case.
Our own city and State is interested in
the question Thousands Of dollars OF
bank aud insurance stock are held in
our city, which is composed Of Govern
ment bonds, and, accordingly as the
question 10 ultimately decided, viii the
large amount be exempt from taxation,
or taxed for City, State, and County pur-
poses
Mr.. Chandler. of our city, who, We be-
lieye, is the attorney of the Evansville
insurance Company, has written out an
elaborate opinion on this subject, for the
consideration Of the City Council, which
we are at liberty to print In II be takes
a middle view, which we have not seen
advocated anywhere else. He thinks
only the actual amount OF Us. bonds own
ed BY the banks should be exempt from
taxation. In other words, that the AS
SCISSOR should ascertain the actual value
of the stock of a corporation, deduc {
therefrom the portion invested in o. 5.
bonds, and assess tax upon the re-
mainder. We invite attention to his ar
gument, which is as follows:
Il is admitted, | believe, that the ques
tion arises upon this state Of facts. The
Evansville Insurance Company is au-
thorized by its Charter, to invest its cap
ital stock in bonds of the State of Indi-
ana, or Of the United States; Il did in
vest its capital stock in United States
Bonds; and with those bonds II estab-
lished the First National Bank Of Evans
Vile The question is, are either Of
these stocks, so far as their value con-
sists in the bonds Of the United States,
liable to municipal taxation.
The Act Of Congress Of Feb. 25th,
1852, sec. 2, provides that, "al stocks,
bonds and other securities Of the United
States, held by individuals. corporations
or associations shall be exempt from
taxation by or under State authority. "
This express declaration OF exemption
| by Congress, was not necessary to its
| existence 1t was the Law without il.
The Supreme Court OF the United States
| Chief Justice Marshall presiding, deei
ded in 1929, in the case OF Weston vs.
The City Of Charleston, that ''a tax i'm
posed by law of any State, or under
the authority of such a law, on stockl
issued for loans made to the United
States, is unconstitutional, upon tbs
broad principle, that "the American
people have conferred the power Of bor-
ro=ing money on the Government, and
hy making that Government supreme
have shielded its action 10 the exercise
of that power from the action of the 10
cal governments" This decision hal
been recently recognized and sustained
by the Supreme Court of the United
States, in several cases growing out o
attempts to tax these bonds under
aud by virtue OF certain statute
of the State of New York, and b,
our own Supreme Court, in q cas-
decided at it's November term, 1864
, involving the right Of the city of Mad
son 10 levy tax on the shareholders O
the Indiana Bank, Its stock being who'll
invested In United States bonds. lei
: note worthy that the Supreme Court i
, | its opinion, takes no notice whatever Q
the express exemption of the act Of Cor
gress, but puts its decision solely on tn
constitutional ground of Chief Justic
. Marshall
| Congress placed this explicit declars
. ton Of exemption in its acts providin
for borrowing money BY the issue {
bonds, for the purpose of making " a.
+ surance doubly sure to capitalists, this
s their loans 10 The Government shoul
r be free from taxation BY State authorit,
!. The act. of Congress was an appeal |
tae people, accompanied with and base
70 upon this solemn pledge, 10 com
y forward with their means to the re
Il cue Of The Government ia its har
Of most i'm ninent peril I'VE
To that appeal the Evansville Insul
= ance Company promptly responded !
loan Of its entire capital stock. An
u can see no reason, as certainly ther
4 ought to be none, why the explicit lal
guage of the act above quoted is n,
y fully as applicable to the Evansville Ii
70 surance Company aud its shareholder
Il under ell the circumstances stated. as
a any other holders of sAstocks, bonds, al
other securities" whatever. The pledI
is made to all corporations and indivii
d ais alike. Ii it be said that Il
!. recent decisions of the Snpreme Cou
of the Upited States. referred TO. We,
in cases where the attempt was to tax q
corporations themselves, but that und
G. the law of this State the city assess
r the tax on the shareholders and not
tn the corporation, and therefore difere
,d rule should prevail, reply that this
4 merely attempting to do indirectly wh
It is admitted can not be done direct
70 and refer to the decision of our Suprer
sr. Court, already cited, 20 show that
al such distinction 10, or can be, recognize
an II II be claimed that the Insuran
i. Company has, with these bonds. ests
~ Iished 8 second corporation, Nation
tn Bank, and therefore the stocks of one
W. the other OF these institutions must
=. liable to taxation; / insist that the q
emption 10 absolute and not depende
ne on the use to which the bonds NAV
" put In fact this very use of tbs
ne honds-the privilege of banking mn
- them-wss one Of the principal inda
ments held out to capitalists, whetl
n individuals or corporations, to inv
IN their money in them.
aly In this connection it il proper 10 O.