The New Orleans daily Democrat., 1878-06-19
BANK CAPITAL.
WHAT CAN BE CONSIDERED TIE FAX
ABLE CAPITAL OF A BANK.
Interviews by a Democrat Reporter OH
the subject.

Interviews by a Democrat Reporter OF
the subject.
There has been considerable interest dis
played in financial circles over the late settle
ment Of the Canal Bank with the State, for
taxes due AS is known, that institution COM
promised with Auditor Jumel for the tax on
its capital by turning over certain warrants
of 1874 and 1875. The Auditor, acting under
the advice of the Assistant Attorney General,
received these warrants and closed the ac-
count. The following was Judge Egan's let
ter:
New Orleans. La. J
Hon. Allen Jumel New Orleans:
I am of the opinion that this settlement will
be for the interest of the State. My reason
| for this opinion Is that these two cases (thOse
| In court involve question OF the liability Of
the bank for taxes on capital invested In
United States bonds. The cases Will undoubt-
edly go to the Supreme Court OF the United
States unless compromised, and the State
might lose the entire tax, $4,000. therefore
recommend the settlement.
Assistant Attorney General.
Subsequently it was by communications In
the papers suggested that these warrants
were of small value, and that the State by
accepting them lost much money. Following
that an interview with Mr.. Newman was pub
lished, going to show that the warrants turn
ed over were not Of deprecated class, but
costing, some of them as high as zone hun
dred cents on the dollar"
The question Of what was and what was
not the capital of bank arose, and whether
In making its returns to the State tax collec-
tor banking institution could omit United
States bonds, treasury notes and national
bank notes was very generally discussed. In
order to gather opinions on the subject that
would be of any weight with the public a
DEMOCRAT reporter made 1t his duty to gather
the following:
CITY ATTORNEY JONAS.
| Among those interviewed on the subject
was Hon. B. F. Jonas, City Attorney, who
was asked to give an opinion on the settle
ment made by the Canal Bank and Auditor
Jumel.
Mr.. Jonas replied that he was disinclined to
express any opinion, nasmuch as the city OF
New Orleans, whose counsel he Is, was In
volved in similar case now pending before
the United States Supreme Court.
ADMINISTRATOR DENIS.
Calling upon Col Denis, the Administrator
of Finance of the city, our reporter asked him
il the national banks made returns of their
treasury notes and national bank notes as
taxable property.
Col. Denis answer was that they made re-
turns on nothing at all, except on the real es-
tate owned by them, claiming as they do that
their bank notes are exempt from taxation,
in accordance with decision OF the Supreme
Court, which, however, says that the States
on their respective shares in banking COM
pantes.
ASSESSOR PAYNE.
Capt. Ed. Payne assessor OF the First Dis
trict, being asked whether the national banks
in his district made any return on their bank
notes, replied similarly, saying that the
banks made no returns to the assessors ex-
cept on such real estate as they are possessed
Of. They furnish, however, to the assessors
lists of the stockholders and the amount OF
the shares held by them.
D. O. LABATT, ESQ.
In order to CLEAN the opinion of some of
the members Of the bar on the subject of
taxation on bank capital and legal tenders on
deposit, the reporter visited several legal
lights here. Meeting D. @. Labatt, Esq, the
Reporter Labatt, want your opinion
regarding the law on the taxation of the
treasury and national bank notes held by our
banks.
law they form no portion of the capital Of a
bank, and are not liable to taxation by a
State. You will readily understand that, for
they form almost what might be called a
special deposit, and belong to the depositors.
There Is no possible way of a banks deter
mining the amount on hand at any one moment
Of time. A man, say, who has 100000 in
notes with bank may withdraw it at any
time, and it would be Impossible for the Off
GERS to make any correct return OF what was
on hand. 1t is the money belonging to the
depositors, and is not the capital Of the
concern.
Rep..Then you think they are clearly ex-
empted?
Mr.. Undoubtedly. The treasury notes
or greenbacks, or whatever you may call
them do not go into the taxable property of
such corporation. Now, there may be q
question if a bank has
A RESERVE FUND
and to it has placed certain sum and holds
that apart. Then / think such a reserve fund
would be taxable, but only then. II you look
at the statute you will find, think, that it
states such notes or bonds are not liable to
State taxation. That's my memory of it.
The capital of bank is not what can at any
time be taken from it, for you can we'll see
that 1t would be absurd IL such construction
could be put upon the law. It's true it may
use the money, but then it's liable to be with
drawn at any moment. The stock makes the
capital.
A number Of other we'll known lawyers were
interviewed ON the same subject, and their
views were the same as Mr.. Labatts. Some,
however, declined to express Off-hand and
without q careful examination any opinion
not had occasion to look into the subject, and
of course declined to state their ideas on the
subject.
Our reporter called next upon Cashier Ber-
cier of the Germania National Bank, Dew
ereaux of the H1bernian National Bank,
Mitchell of the Mutual National Bank, and
President Kennedy Of the State National
Bank, each Of whom were of the opinion that
the State had not the right to tax United
States bonds held as capital by the banks,
nor even United States treasury notes and
National bank notes either on deposit or
HELD BY THE BANKS.
Mr.. Mitchell called our reporters attention
to section Al of an act ''to provide national
currency secured by a pledge of United States
bonds and to provide for the circulation and
redemption thereof" approved March 8, 1865,
which section provides that land in lieu of
all existing taxes every association shall pay
to the Treasurer OF the United States in the
months OF January and July a duty of one
half of one per centum each half year from and
after the first day of January, 1864 upon the