The sun. [volume] (New York [N.Y.]) 1833-1916, 1875-12-03
THETAX ON BANK CAPITAL.
THE UNEQUAL BURDEN BORNE by
TuE NITIONfL BANKS.
Their shares Taxed Mt Par, willis Those Of
Other Corporations nro Assessed nt Not
More than Onc-iIait their Actual value.

Their shares tn xed ut Par, willis Those Of
Other Corporations nre Assessed mt Not
More than One-iIaif their Actual Value.
WAsnINGToN, Dec. 2.-The Comptroller
OF tho Currency In his annual report. says that
IN September last he addressed circular to tho
national banks requesting returns OF State tax
alton for tho years 1874 and 1876. The assess
ment for 1915 had not been generally mado at
that time, and the returns for that year arc
therefore meagre. The number Of banks In
operation In 1874 was 1890. Returns were re-
ceved from 1870, having capital Of si74, $4,000.
These returns show that the national banks OF
the State Of New York pay the highest taxes OF
anv OF the Eastern CT Middle States The
United states taxes for that State In the years
named were respectively 80, 90 and 9pcr cent,
and the State taxation 3.5. 2.7, and 20 per cent
Total In 1861 6.l In 1899. SO in 1874, As per cent
The Comptroller has heretofore, in his report,
called the attention OF Congress to tho fact that,
while the national banks are subject to a tax
upon their entire capital, which can be easily as
certained from their books and reports, and not
unfrequently upon the market value Of their
shares, other corporations, the amount Of whose
capital aud the value OF whose shares can be as
readily ascertained by appropriate legislation,
are assessed at not one half OF their value, while
private firms and individuals are almost wholly
exempt from beari ng their share OF the burden.
Letters recently received by the Comptroller
from the Presidents of two principal banks-ono
IN the East and the other In the West-refer to
this greatest of al economical subjects In such
plain terms that he cannot forbear calling the
attention OF Congress to their suRgestions.
Many Of the share holders OF the national
banks depend for their income chiefly upon the
earnings OF these Institutions, and II does not
seem Just that these thousands OF sharehOld-
ers shall by any construction OF law be COM
PEELED To pay All undue proportion Of tax. IL is
submitted that tho law as now Interpreted by
the different State Courts ami by assessors and
collectors Il neither cquitube nor honest.
Gently refused tn paw iis taxes on the ground
that the shares of the negbborine state bank
were ass. sicd at no greater value than It's own
though worth several times ns much
The Court Is understood to have held that the
bank had no rights to complain since its shares
were not taxed above their value, aud that II
was not for n to consider whether tho shares of
other banks OF much greater value were taxed
at the same rate. The Tax Commissioners OF
New York city propose to tax the banks OF that
city, national and ate, not only upon the full
par value OF their shares, but on tho total
amount Of their surplus without any allowance
or abatement In cons squence Of this purpose
acomnittee. composed OF officers OF the i've
principal hanks IN that city was appointed to
confer with the Commissioners. lhe law OF
~, N,w W toIA pInN'ucs W sit sIustante .na - huVu
OF the property OF individual stockholders as Is
held by them In bank stock liable to
be taxed for the value Of the shares and
"a penalty is prescribed II any bank allows the
transfer ~ shares after thu tax has become due
aud before IT'S paid. rho banks In New York
city. In order to avoid annoNance and yeNattous
suits, have Tor several years Iaid the taA about
three per cent nnnul lllyl to the city direct. in
stead ~ leaving II for the stock holders TO nay,
and the Chairman Of the committee, in his com
munlcation, writes as follows:
Ih' Tax Commissioners refuse to allow time either
appeal 10 the legislature for redress. They axe the
sogri..,y IS the ,sw and As t. conris b,ys sposes
they must act AMI act before the ist Of January 1870
Fr.tIwe ,peas for asi S NJ, Sanss and say tho, owe
~satre "f Sa yVs s.e9ni s1 11s
ihe .urea. Of nailonai bspS. from Ialalon Tor wise
stead weak hans. tor me ssicy ana ocne, of the
s,ockholdcrs ON the other hand 4 local isIatlon
70 be eherc'sd without any restetop on the part Of
out Of eSsieuce and state bsnks subsitutrd with all
that 4 the ell.uns pr9nts of bank. now leid ,ur
Der cent taat fund viii be divided among tho share.
hodcrs FOR the smie reason that no bank could anod
4, secoaam1he construction OF the s,aie law by The
Tor mo ~ say, me teS s t he levi on the yare ~
the shares not tie market value intrinsic value but
suy on ,ifyng ~ord par VA. nsd,rsi1od the tx 6a.
opted by the taS comm.sioger, mas b .en practical
itai oi nauk N 30 not 0c Nh At Ignerrtc ttan Is
% mot tS conSr 0 ha, 4oa The ss at to ;S eSeS SS
@ ray sS axe. axe P a69 S & 9SeT 5a PrB
stance 81 tsoo0O capital IS taA,d On th.t sum, wais
Th a. "pnTsivs S m IN "a p NV
1hird hs wrtlim llai the state hi- no rg't what
g rs @ sp cy rTined y, h e f ss iSSn w
ms nrlutlpe u ihAlt Qiltt tNpuAtN hf tue hlied
Saes supreme 'onrt Ia me recent DECISION Of ssss
40 iul. The iarulers' au1 NrChklts' .lflIuIl Bank
of Buffalo pgt. Peter e.. beariuS Ia relation To usury
In hat case, under the tn-d head, the Court -a,s
The national bluha brought into existence the
GOVERN for It's own good. The LatiOnal Govern
meut has exclusive contr over them. No state has
any against the national viii In ,grI to the banks
a. in regard to AL institutions ut national creation, the
states have no power uY tHNAti1n or Otnrrwsc
tsrd impede, burden, or IN manner control. This
Is clear and, A. We think, conclusive.
The Comptroller urgently recommends the
repeal of the tw1-cont stamp tax on bank
checks. The revenue derived In the H. NJ year
ending June ~, 1874 from the salc OF two-cent
stamps affixed to sight drafts aud checks was
Si.l12,5g The total amount OF stamps manu-
factured during the fiscal year ending June 80,
1875 was $l,gii, l66. The amount OF income
arising from the actual use OF these stamps
d".ing any fiscal year cInnot be accurately
determined. The annoyance TO banks aud
this ofce, growing out OF tho strict enforce
ment OF the PROVISIONS OF the law, has been
greater than that OF all the other restrictions Of
the national banking laws combined, and the
Comptroller, believing that the amount derived
from this source does not cOuuterbdlance tho
evils Arising from the Surveillance to which all
banks aud BANKERS are necessarily subjected
thereby, and being satisfied that in almost every
requirement Is chargeabe To the carelessness u
transient depositOrs or 10 the insuiicency Of
the mucila2o on Government stamps, urgently
recommends the repeal Of the provision fequir-
ing the efixing Of the two-cent stamp upon
bank checks.
Tables are given showing the ratio OF diyi-
dends to cIpital aud 10 capital and surplus,
from which it appears that throughout the
country the ratio OF dividends to capital In 1875
was $50, anu to capital aud surplus ISL. In the
state OF New York the ratios were 90 and 1.Uo
In pennsyvdnia ge aud rs, and In Massachu-