The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-07-19
BANKERS AND BROKERS' TAX.
UNITED STATES CIRCUIT COURT
Before Judge Nelson.

defendants who the assessors and collectors OF the
Thirty second Collection district OF New York. under the
internal laws for the purpose of restraining
them from the and collection Of tax claimed
to have accrued against the plaintiffs bankers doing
business as brokers' within said district under the fol
lowing circumstances The plaintiffs have license
bsnkers and have from time time received at their
banking house Stocks bonds and bullion for SALE and
also have, during the same time, received bills OF ex
change and promssory notes for discount and SALE and
did discount sell the and for the account OF
the parties from whom received, and charged the Gus
tomary compensation bankers and also during the
time aforesaid did, at their banking house, lend and ad
moneys various parties on stocks bonds and
bullion and after such adv loans did sell said
stocks bonds and bullion on OF the parties
whom the received and TO whom the moneys
and advanced deducting from said sales the
moneys loaned and advanced with the interest and
customary charges as bankers and also bought and
sold stocks bond- &C. Their own account and not on
commission or for others The tax claimed as having
accrued out OF the above dealings twentieth OF
per centum monthly all the sales OF the stock bonds
&C, under the ninety-ninh section OF the ACT 10 y =
"bankers dong business rs brokers me question IN
the case Is whether or not the panls IN carrying on
the aforesaid business undHr bankers license arc 70 De
regarded bankers doing business as brokers Tpc rst
subdivision OF the seventy section ~ 25l ehacIs
that bankers employing capital not exceeding 5000
shall pay 500 for a license and two dollars for every
thousand this amount, and then deiinos Tue term
bankcr."Every person, firm, company &C. nay,n ga
deposit or collection Of money currency, subject 10 DE
paid or RENTED upon draft, check or order t2 where
bills OF exchange promssory notes; t3) where stocks
bonds bullion bills OF exchange or proufssoy notes are
received for discount sale shall be regarded banker
under this actn Besides the license fee exacted the
banker under the hundred and tcaih section page
277 pays tax of one-twenyfourth OF one per cenum
monthly upon tho average amount OF deposits-one
twenty fourth per cenum monthly upon the average
amount of the capital OF his bank beyond the amount
invested in United States OF one per
centum monthly on the average of circulation
f by any Dankand In addition, onesixth OF one
per ccn.u@ monthly on ths amount OF r S,r co 6e
and tho above tax the burd ms imposed on the
banker for the privileges conferred Now among these
is the privilege Of business set forth in the bill
Of complaint and TO which have referred at large;
and yet claimed the plaintiffs are liable 10 tho add
ton OF the act According 70 this construction the
license privilege ,of tho banker would De OF little
va'uo He might. indeed receive deposits and pay them
OF default Of repayment he must not sell the pledge
TO reimburse himsclf-he may receive stocks, bonds,
TO sell If he docs il il insisted he instantly becomes
broker aud liable 70 tn, brokers monthly tax, In add
ton 10 tho bankers which he has already paid We
not arree 10 this view Of act the contrary
satiscd tho banker s both by express terms well
BY necessary implication empowered 70 carry on the busi,
useful results That when he Is authorized to lend or
advance money stocks bonds, &c, he has tho right.
curty into money by way Of reimbursement-and when
auth rized TO stocks bonds &c, for sale, he
himself broker. Tho United states vs. Fise1tt H..
decided al the last tcrm carried the privileges OF the
banker f.r beyond the present case; fos was there
for himself and his account undcr his license
business spcc'ncd IN tho definition Of banker.
That case In cfrct decided that any business which
banker could carry SUCH did not fall within the
ninety section OF tho act The Of tho plain
tits forth tho fourth paragraph OF the BILL is
in substance as follows That CARRYING their bust
bankers they purchase stocks, bonds &c. for
Others but make tho purchases 70 their own name ana
their n,me. and hold the stocks as security for re-
payment by the persons for whom purchased; and on
charges. dalivnr tho stocks bonds &c. = per agree
mont or In default Of repavmcn,. thy sell the same
side Of tho business &C banker defined ny the act,
but directly within that Of broker, and subject
Ss ,ax 'n r,r IN ans ~ h dealings
In stocks, bonds &c. are brought WITHIN tho cate
CORY OF bankers doing business as brokers, their
whole business bankers Ia thereby brought with
aud this extraordinary proposition isanpposcd 20 no De
oidcd ~ the above refcrr,d to- The ninth su5d'
vision page 25a, declaring who shall DO broker Is as
foIowsf 1Evcry person. nrm or company, &c except
broker 10 negotiate purchases or sales NJ stocks,
bonds &C, shall be regarded as broker The exosp-
ton takes the banker out Of the category o. broker and
10 make more clear what intended by the cxcsp
ton proviso is added, 'that any person holding
license banker shall not be required " take out
rcnsr u broker meaning, obviously thai he may
do business broker under hs license as bankcr
But surely there nothing IN the provision which thus
s,rr,o on under Inc bansers rense tha, suss ss the
idea gives any counenance TO IT. that dealing m both
capacities merges the banker into the brcker 70 A. 20
subj vt N, his dealings "a the broker tax The air and
natural Inference would seem " be the other way.
namsiy that the broker IL merged IN the banker. But
suppose the reasonable and proper conclusion Is
tia, although the license Of thc banker authorizes him
20 do the business ~ broker without further payment ~
money yet 80 far he may do that business he s 10 be
regarded broker aud must pay the brokers' tax.
This we think, Ia not the only natural conclusion aud
far legal effect from the provisions OF the law referred
20 but In confirmed viii DO seen. by the language or
ninety ninth section imposing the tax on brokers'
follows -.That all brokers' and bankers doing bust
brokers' shall be subject 10 pay the following
duties &c clearly enough implying that the banker,
besides carrying his own business may also engage IN
business rs broker but IN such case and ~ respects
the business done broker, he must pay the tai m.
posed, and above what he has already paid as
banker This of tho statute was taken IN h" case
OF the United states vs. Fisk ct al and Is stated in the
| op,non in = few words Now, = banker says Mr..
Justice Gner 'pays q much higher license tar than
broker aud permitted 10 prusccuc or carry on the
busncss or profession Of broker wi,hou, paying any
further license but he prefefs he may not combine
that business with hs own" Without pursuing the case
further. injunction must issue In conformity with the
above opinion II any dculty arises in the settlement
| Of this order Il eau he referred 70 me
John " BurriI' and WIN. N. Evars Tor plaintiffs
Samuel Courtney, United States District Attorney Tor
defendants
P1rcha-ins and Selling sterks.
L>tyn R.ns,,n Il a. 70 sA1,san shoot There Is one
question in hs not involved in the case OF Clark
and others W. Gilbert and shook in any hereto
fore before this court and that u, whether or not
banker who purchases and sells Stocks bonds, &C. "
others and therefore tails within the caegory 80
banker doing business as a broker, but WHO es ..
stocks bonds 10, through the ntervcntionon 90 Tn,
Is liable 70 pay the brokers tar under ,Sv ,ssr
argument H. that the tat on the sale, h sieuay es
paid by The broker called IN an M, mn0 court on short
notice and at The close Of th sitting we ~. n :. asp as
argument on Che point ana a. we same YIN" ~ "a
manner Of conducting che business thus oamea 70 10
| exempt from tar.
| Receiving Bonds fer sale.
Angstn = Peabody ct al ra . = o'oe'' '"' .
Shook -fhe opinion in the case OF L. U Oark o. w.
| Gilbert Shook disposes Of this csse
The plaintiffs are bsnEsrs and do business as such oy
receiving stocks, bonds &c, for sale, and by lending
and advancing money on stocks bonds &C. and " de.
fault Of repayment sell the same; and also purchase
and sell stocks bonds SC, thesr own account ana
not on commission OF for others They also purchase
and ssll stocks bonds SC for others, under certain
spulatons as 70 risk, losses and piohts when ,ne