New-York tribune., 1877-11-12
THE TAXES OF BROKEN BANKS.
svv AToR DAVIS TO TAKE CHARGE OF BILL on THIS

lBY TELEGRAPH TO THE TRTBUNE.l

IBY TELEGRAPH TO THE TRBUNEl
WASHINGTON, Nov. 1l-Seyeral Chicago
savings banks have had representatives in Washington
during the last two three weeks for the purpose ~ oh
tanning relief from internal revenue lax on the hepos-
ts OF those institutions OF this character which have
become insolyent. They have had several interviews
with the Commissioner Of Internal Revenue but with one
cxception perhaps have attained the object Of their
visit one ~ the ATTORNEYS has prepared bill for
admission TO Congress in order to finally settle the whole
question Of taxation Of savings banks deposits This
bin has been submitted to senator Davis, wno VIII
undertake the charge Of it, He desires, however that
All dcposfors Interested IN its passage shall send cii-
tons here asking ts adoption by Congress. The follow
ing is the text OF the proposed bi with the reasons
ass cncd for is passege:
ARill to Remit Taxes ~ Tnsolyent Savings Banks.
b u cigci n, ctr lat n cv.lY case wherein me hahk
VA. in cx sruc. June Il 1-1i. and which has caim'd
90 Joe snyncs bank. and wEri las been recognized as
such hy the laws ot s state ana winch haS made returns
o.. syiue, banks To- thr Department ~ Internal Reye-
mo GIe fccoWc. oI shall bcc.W. nsoly"Nt, th"n any
t Sc or ria ioo5 ID, b, Duo from -uc1 bank to the
United ates 20 the lime o. ur dfI2 -uch insolvency,
Ann Ice Nv ne Comi Of Iutcrur Rcyenue ab1ed
and amull d: Provided 't mo surh - snail be ablted
yc so fax as the collection thelcJt Wruld oprrat" 10
lessen tn. sum rccivabe ty the dep"eors in such bank
The reasons assigned by it, friends why this bill should
DE passed are 81 substance as follows; Section 34oS OF
Tho Revised S'autc n amended 10y the Act Of June ls.
1874 provides that savings banks shall be semannualy
taxed on capital or deposits above $4,000 in any one
name but shall be free from tax deposits below thai
,pouut In the case of tie insolvency Of savings bank
II naturally occurs ha, certain taxes have accrued since
thc last payment which accrued taxes arc by well
known principles OF law FIRST lieu in favor of the Gov
o,,,t1.ut on all assets Of the insolvcnt institution.
Further II is y fact. that certain savings banks.
,foornized as such by the laws OF their respcc-
tiv, states and which have heretofore az such
-cportcd seni-aunuay 10 the Internal Revenue
D partmcat claiming AMI enjoying the exemption from
tovafion on somo deposits as above explained, have
ccr assessed by the Internal Revenue Department the
amount OF that tax on the grouad that these saving.
hunks although 50 recognized by their respective States.
10 not come within the puryiew Of the act and have
hc.p cioyng an exemption to wich they are not err
TILED A the saving, banks II this class have also become
fsoycnt the purpose of the proposed act IS to abat
e Government tax far its collection would entail
odditiopal los. on the dcposors In nsovcut savings
hanks on the ground th1t first the capital, profits. ANA
value of the franchise or other taxable entity which the
law ORIGINALLY omit ed To tax. has ceased l" exist As Sucu
rrfty and the tax, IL now collected must come drrcil
nom the individual dc1CsiioTs. II becomes theh'
tay lon-er the Oanh, MT upon
i,s rrcditors. second, from the moment of me
,ctraI insolvency Of the savings banE whlch
,o lao fairly assumed have preceded the apparent
tc concern become IN truth sacred trust. which should
,,nt b, taXcd but should be treated, IN TIC hahGs OF
,.,ou sorycr IL may h2 found, aS bticnEhg Wholly anu
ctrelv Ia thc deuGsltprs Third public policy requires
that ndustIy ard thrift should he rhc"utaLtu, lhe'
IRE ~ discouG thereof arising from error d'-
rau md dS.s-r which tie crsors no" ought 10 %
rriipvcd aud were in no way h4McYoItlI, should ot
be increa sed by the Intervention or the HONcihmet ~
,nfcrcc ita uHlr claim 10 any tax whatever.
senator wis viii earnestly advocate the passage oi
he