The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-10-30

In Illinois, the banks of that State were by
the State taxed upon their capital stock and
surplus funds, and there was no provision
specifically taxing the shares. So the Supreme
Court of the United States held that the Share
owners in the national banks were not liable
to taxation in Illinois.
In Indiana the State levies taxes on its own
banks upon their paid-up capital, and does not
tax the shareholders upon the value of their
shares So, again, in Indiana the share
owners in the national banks avoided State
taxation.
In New Hampshire the Supreme Court has
decided that the sbare.owners in national
banks cannot be taxed by the State.
In Ohio, banks chartered by the State are
taxed upon their capital stock and undivided
profits. There is no provision of the State
law taxing shares in State banks by name.
In April, 1868, the State Legislature passed
law which requires call shares of stock
in any national bank located within the
State to be listed for taxation, and taxed
in the city or county in which the bank is
located" Thus, in Ohio, the share-oWner of
the national bank escaped bearing his proper
ton of the expense of carrying on the State
Government.
There are many other States which, under
their existing laws, cannot tax shares in Ma
tional banks. This inability of State taxation
springs, however, more from the defect of form
than substance, and can be remedied in either
of two ways:-First, by the different States so
altering the tax laws as to conform Cf pos
sible) to the requirements of the 4lst section
of the National Banking law; secondly, by
modification of that section by Congress. The
fact, however, remains that the share owners
in these National Banks have avoided all kinds
of State taxation.
In some of the New England States share
owners in these national banks have rid them
selves of State taxation by raising legal
points upon that portion of the proviso in the
torty-frst section which declares that shares
in these banks may be included in the per-
sonal property of any person sin the assess
ment of taxes imposed by or under State
authority, at the place where such bank is
located, and not elsewhere" The Supreme
Courts of New Hampshire and Maine have
held that share-owners in national banks
cannot be taxed on the shares in those States,
because the State laws provide that person
shall be taxed on his personal property i'll the
place where he resides, and not where such
personal property is situated. The Supreme
Court in Massachusetts, where the State law
in respect to place of taxation is the same, has
decided the other way, and held that there is
no such inconsistency in this particular be-
tween the tax laws of these States and the
National Banking act. Mr.. Justice Hoar, in
delivering the opinion of the Court in Massa-
chusetts, said that ''the true construction of
the proviso (to the National Banking act) does
| not confne the assessment of the tax to the
| place where the bank is located, but merely
| requires that the tax, to be valid must be
imposed under the State authority existing at
| the place where it is thus located.'
The Supreme Court of Maine, on the con-
trary, says:-
"The law of Congress creating national banks
| and authorizing the shares in bank to pe
| taxed in the city or town where IL is Located,
requires that all such taxes shall be applied LOT
the use and benefit of such ciby or town,
some other city or town. The assessment and
taxation OF such shares, in any place other than
that where the bank is located, would be a clear
| violation Of the act of Congress- and an act of
taxes, when collected, to be paid by the city or
town where the bank is to that where the share
holder resides, would be an attempt to do In
directly what cannot be done directly"
As it would not seem practicable for the city
of Portland, for example, to levy and collect
taxes on shares in national bank in that city
owned by person residing in Chicago, this
decision would practically enable a share
owner residing out of the State to escape all
taxation whatever on his shares.
In what we have said in the present article
we have not intended now to cast censure
upon the technicality of the national legisIa-
tiOn upon this subject, but simply to call at
tention to the fact that the share-owners in
these banking institutions escaped State taxa
ton, and to the other fact that so many of
the States have endeavored in vain to make
these profitable investments contribute to the
relief of the burdens which so seriously oppress
all other kinds of property, and so cruelty
weigh down the laboring classes in every state