The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-11-16
INTERNAL REVENUE.
SUPPLEMENTAL REPORT OF THE COMMITS
sIoNER-TAxRs UPON BANKS AND BAEKERs-
THE QUESTION OF THE TAXATION OF SAVINGS
INSTITUTIONS

sIoNER-TAxRs UPON BANKS AND BANKERS
THE QUESTION OF THE TAXATION OF SAVINGS
INSTITUTIONS.
WASHINGTON Nov. Is, 1875.
Inc following report ofthe taxation upon the capital
deposits and circulation OF banks and bankers appears
as supplement 70 the report OF the Commissioner or
Internal Revenue
National banks pay taxes TO the Treasurer Of the
Cnted states IN the months or January and July of
one half Of per each hall year upon their de-
posts and the same rate each half year average
amount Of their capital stock beyond the amount in
vested in United states bonds These taxes
collected by the Treasurer and constitute
no part OF the internal revenue snca ma
organization Of national banks the amount
realized from these the close Of IN. last
fiscal year has been s64,9s9376 49, the amount realized
during the last fiscal year having been 81 30 75s 40
The amount paid by the national banks ON deposits
alone during the period OF their existence up TO June
during The last fiscal year IS So SIG 81 other taxes
on banks and bar kers not national collected under
the Internal Revenue law The persons, firms
and institutions thus taxed embrace every
incorporated other bank and every person. firm or
company having place Of business where credits
opened by the deposit or collection o. money or cur
rency subject TO be paid RENTED upon dralt check
order where money Is advanced or loaned
stocks bonds bullion bills OF exchange, promissory
notes are received Tor discount for sale These
taxes consist OF one-twenty-lourth Q-Al OF one per
cont each month on the capital employed By these
banks aud bankers beyond the average amount in
vested in United States bonds of onetwelith ll2 Of
per cent each month upon the average amount Of
one-sixth go Of one per cent each month upon the
average amount Of such circulation issued beyond the
amount OF ninety 90l per cent Of the capital Of the
bank, association, company or person.
DEPOSITS IN SAVINGS RANKS.
have been thus particular IN calling your attention
TO the laws regulating taxes upon hatlonai banks ana
upon banks not national, and upon bankers, Tor the
purpose Of presenting iorciby the exemptions on de-
posts savings banks. 1t is provided that the de-
posts associations companies known provident
institutions, savings banks saving funds savings in.
stitutions having no capital stock and dong no other
IN
vested for the sole benefit OF parties dcposting without
profit or compensation 10 the association or company
shall be exempt from tax much OF their deposits
they have invested in securities Of the United States,
and all deposits not exceeding 81 900 made IN the
name OF any one person Congress by the act Of
June lS 1874, extended this exemption from
taxation to deposits in such institutions then
in existence dong business only savings banks and
recognized as such by The laws Of their respective States
or by Congress. The exemption from taxation To
Y be the same with deposits savings institutions
having capital although IN TACT they had a capital
stock bona for the additional security of the deposit
ors in fact the law authorized dividend OF eight per
cent on the stock in providing that the excess of profits
above this dividend should be divided among the de
postors and besides, provided that interest at the
of not less than = per cent be paid IN all
to depositors, be made good if accessory from
capital stock This Is the present condition of the law
The Internal Revenue act Of June 30, 1864, exempted
savings banks from all taxation where they had cap
tal stock and confined Their business to receiving and
oanng deposits for the benefit Of dpostors only, doing
no other business Of banking. The act of March 8,
1865 struck out the exemption and Of course, left
ings banks nhe to taxation upon their depositorS.
But Congress the 18Th lSbb having the
subject under consideration, subjected 10 taxation all
deposits IN prov ident institutions savings banks
savings institutions where the deposits made by any
4 one person amounted 70 5000 or upward BY the
4 existing law. seen, the deposits made by
/ any person not liable to tax unless
they exceed 81 600 and this exemption instead Of
Ing confined to savings banks having capital stock
and doing banking business, is by recent lcgis
laton extended to classes Of institutions bearing KIN
4 drcd names, having capital stock and making dIvi-
dends The fruits of this legislation the ap
pended table which exhibits capital and deposits held
ufl In hort nnfl nm mi in
and the aggregate average amount or the during
the six months previous in the several States and Ter
rtorcs taxable under the Internal Revenue laws,
/ ana the percentage OF the taxable amounts
\ with the total amounts held during May last 1t will
be observed from the footngs Of this table that the
average amount Of capital held by these banks and
brokers mot natonaD in May 1875, 5000 SD, 09s
that the average amount Of their deposits in the
month 81, $40 Oh, SlS that the total capital and
deposits the month 81, $40 $50 Oil, while
the amount of the taxable capital and deposits these
banks and bankers during said six months was only
$3.50 1874 10, little more than threefourths OF mill
ion OF dollars, while the amount Of actual capital and
deposits Of these institutions was in round num-
bcrs 81 DAG, 600, 900
1t will also be apparent at glance how unequally
Y this taxation is distributed among tho States Thus
upon gwen amount of capital and deposits the tax
California as compared with Massachusetts is
one, and Michigan compared with the State,
as sixteen 70 one; on Virginia. as compared with YER
mont five 70 one The city ct New York, possessing
taxable capital and deposits $50 600 900 less than Name
New Hampshire, Vermont Massachusetts and Connce-
tcut combined tax three times great these
states while these States, having capital and de-
posts three times great California pay about one
\ half the tax thereon that is paid by California.
present these figures for your consideration and for
such YOU deem proper in your report to Con
gress and with this single remark THAT II deposits in
1 these so-caled savings institutions thought y
proper subject for exemption from taxation where they
employed with such profitable results IL bet
ter TO return 10 the rule adopted by Congress 1866
where deposits made by any one person in excess Of
N 5000 subjected To taxation.