The daily gazette., 1878-12-27
HOW THE NATIONAL BANKS ARE
TAXED


/ TAXED.
J 1t is not to be expected that the present
session of Congress will pass over with
out some attempts at legislation for or
: against the national banks.
or course the contributions exactad
come under three heads, national. state
and municipal. To the Federal Govern
ment the national banks turn over every
year, In sem-annual installments, duty
OF one per cent. upon the average amount
OF Their circulating notes outstanding.
lhey are also required to pay one-half of
one per cent. upon the average sum of
their deposits and like rate upon the
mean amount of their capital stock not
invested in United States bonds. Now,
the aggregate of such duties paid TO the
Commissioner of Internal Revenue since
these institutions were organized had
reached by July l of the present year
upward of $S6,000,0O0. One object in
imposing these taxes was TO make the
system self-sustaining, so far as cost to
the Government was concerned but as
a matter OF fact the entire outlay for the
Office OF the Comptroller of the Currency,
from its establishment until date, has
fallen short of $5,000,000; that is to say,
1t represents about a twentieth of the
sum turned into The Treasury by the
national banks. Nor is it to be over
looked that the whole of this large sum
has been collected without expense to
the Government.
From the returns made by the national
banks during term of years following
1875 We can frame a Trustworthy esti.
mate OF the entire contributions levied
for State purposes within that PERIOD
The aggregate sum thus paid cannot be
placed lower than a hundred millions
and we observe further, that while the
ratio of the State tax to the capital stock
Of the bank was lower than that of the
Federal impost up to 1872, yet since that
year the reverse is true. At present the
whole burden laid on these institutions
by the national and State Governments
represents on an average three and g
third per cent. of their joint capital. And
here it may be interesting to note some
Of the differences in percentage CORES.
ponding to geographical divisions. 1t il
in the States of New York and Nebrasks
that the banks are most heavily taxed
the ratio Of impOsts to capital there
reaching four and six-tenths per cent
Then come the so-called Granger States
where the rates vary from four and {
third to three and third per cent, ant
, next New Jersey, where the ratio of tax
; alton to capital is almost identical will
the last named figures. Distributing the
country into large sections, we find tn,
l apfa IF tav tn han MI nj la
gest in the Middle and Western States
being severally stated at three and six
tenths and three and five-tenths per cent.
while 1t only reaches two and eight
tenths in New England, and but two ant
seven-tenths per cent. in the Southern
States. Taking the whole country to
getheI, the ratio of State imposts to tn,
capital stock of national banks during
the year 1877 was one and nineteenth
per cent. In other words, the sum leviet
for State purposes about one-third large
D than that paid into the Federal Treasury
The remarkable inequalities in tn,
! rates of taxation laid on banking capita
to different municipalities may be illus
trated by returns from some of the prin
cipal cities. For example, in New Yorl
CITY bllt lOtdi ouiii hldnI ilOih bohh
for all fiscal purposes actually represent
five per cent. of their united capital. Ii
Cincinnati the ratio is four and six
, tenths per cent, in Milwaukee it is fiv
3 per cent, in Chicago five and eighteenth
, per cent, and in Albany it touches tn
|, surprising figure of six and two-tenth
E per cent. Turning from ratio to aggre
/. gates, we find that the banks Of New
York city alone paid in the shape o
taxes more than three million dollar
during the year 1877. One etie ct of thes
high rates of taxation may be discerne'
in the reduction of capital and surplu
by the New York city banks. The tota
decrease which has occurred during tn
last five years, if we include the nationa
and State banking institutions in thi
municipality, falls but little short O
thirty million dollars.-N y. Sun.