New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-08-30
TaytTION or BINK SHARES.

i
The Weaver ease, which recently attracted
so much attention. is not the only inst nee IN
which the Supreme Court has felt Justified
lately in inteIpo ing between the National banks
and the State tas-gatherer. Decisions nave
been rendered in two cases from ONO which
nav have "A wide application. indeed, the
general question has constantly disturbed
financial circles throughout the cOun-
try ever since the National banking sys-
TEN was organized Congress allows the
states to tax owners Of National bank stock
upon their shares, but imposes the restriction
that State taxation shall not be at greater
rate than is assessed upon other m0neycd
capital in the hands of individuals The
laws, or the methods employed by the States
in taxing the banks, have frequently seemed
TO the banks to violate the letter the
spirit of this prohibition and applications to
the courts for relief have been frequent In
the Weaver case, the State tax law, intending
literally to obey the rule of Congress that the
tax should not be "at greater rate
than upon other mOneyed capital, prescribed
the same rate per cent for bank shares and
all other like investments; but it gave per-
mission to other investors, in returning the
taxable amount of their property, to deduct
their debts from the gross holdings and be
taxed only upon. the balance. 1t withheld
this privilege from the owners of bank shares,
State or National, the effect of which
was to increase the tax ultimately
cxaced from the owner, unless indeed he
were wholly without debts. The Supreme
Court said that this was contrary to the OBJ
vious purpose of the United States law, and
must be stopped that the rate of tax which
by the law must be equal included the
mode of making the assessment as well as the
mere figures of the percentage.
The more recent cases in Ohio arose upon
a feature of the tax system of that State
which has been very common throughout the
country. The State Constitution and the tax
laws declare that taxes shall be imposed by
a uniform rule, on various kinds of property,
according to the true value in money. Most
of the States have, in one way or another,
said the same But while the OHIO law
contemplated an equal rate of taxa
ton on all kinds of property, it
committed the administration of the rule,
necessarily, to boards of assessors in the
count les and boards of equalization for the
State. These boards agreed on system of
vaung property by which land and chattels
were to be estimated at about onethrd of
true value. money capital not in banks at
six-tenths of true value and bank shares at
full value. Tax assessors have generally |
done something of this sort. By common
consent, and generally contrary to whatever
positive law there may be on the subject |
property is not valued for taxation at its
actual value. Real estate, in particular is
seldom valued much higher than half its |
market price. a prominent reason for this +,
common consent TO substitute an under |
estimate for true valuation has probably |
been to atone somewhat to the land |
owner, by diminished valuation, for |
his greater liability to taxation because
land cannot be removed or hidden. In the !
Ohio system there are some traces of hope
to escape the restriction upon taxing the Ma
tional banks. Two of these banks paid to
the Collector the amount they considered |
would be fairly due from their shareholders
if the shares were valued at sx-tenths, like
other moneyed capital, and brought two suits
to restrain collection of the excess.
In one of these suits the claim chiefly urged
was that the administration of the law was a
violation OF the OHIO Constitution, recurring
valuation to be by uniform rule. AS to this
point the Supreme Court has said that the
law is well enough it contemplates uni
form rule; the inequality has been in
Iroduced 10y the boards of assessors.
And the courts cannot annul law
As unconstitutional merely because officers adj
minister ii, contrary to its terms, in an I'M
constitutional manner. But citizen has
night to be protected against unjust taxation
by maladministratIOn of a correct law. Hence
he injunction was sustained. The doctrine
IF the ease, if generally adopted may uproot
he system of unequal and fictitious valua-
ions, with respect to property OF all kinds.
In the other OF the two suits the leading
lain was that the OHIO method violated the
Act of Congress. And the Supreme Court
id that such was its obvious effect. ANY
,ystem of assessment which eXacts from the
owners of the shares of National bank n
anger sum in proportion to the actual value OF
hose shares than il takes from other moneyed
.aptal, valued IN like manner, does tax
he shares cat greater rate " within the
of the prohibition, and must be
abandoned.
Tainnany is on top of the New-iork Democracy.