The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1881-05-26

are not taxable by state authority.
These banks issue what is called |
national currency, which the United |
States receive and guarantee pay
ment. This makes their circulating
paper the obligations of the United
States equally with the United States
notes not bearing interest usually
denominated greenbacks. All these
bills being obligations of the United /!
States are within the rule laid down !
in the case of Weston rs the City of
Charleston before referred to and
would not be taxable under state
authority were it not permitted by
Congress.
| It is, however, permitted in one
way only and in that way it has its
limits. The permission is in these
words provided that nothing in this
act shall be construed to prevent ali
| the shares in any of the said aSso-
Citations, held by any person or body
corporate, from being included in
the valuation of the personal proper
ty Of such person or corporation in
the assessment of taxes imposed by
or under state authority at the place
where such bank is located and not
elsewhere, but not at greater rate
than is assessed upon other moneyed
capital in the hands of Individual
citizens of such state; provided fur
Their that the tax so imposed under
the laws of any state upon the
shares of any of the association
authorized by this act shall not ex-
coed the rate imposed upon the
shares in any of the banks organized
under authority of the state where
such association is located; provided
also that nothing in this act shall
exempt the real estate associations
| from either state, county, or num-
cipal taxes to the same extent ac-
cording to its value as other real
! estate is taxed. See i'd. 112, s. Al.
A glance at this law will tell us
that when a bank goes into business
under this act its bonds of the Uni
ted States deposited, its circulating
notes, and its greenbacks in its
vaults are not as such taxable under
state authority, but its gold and sill
yer, its banking house and other
real estate and its bank furniture are
so taxable. And the shares of its
shareholders are taxable in the
place where located to the same eX-
| tent as other moneyed capital is
| taxed. We add bonds of the U. S. and
these circulating notes are not tax
able in the hands of individuals,
though gold and silver coin is. These
national banks, in one respect, are in
a worse condition by being incorpor-
ated than they would have
| been if not incorporated. 1t
| is this, if not incorporated
| the shares would not be taxed now
these shares may be taxed. These
, recent bonds have on several differ
ent occasions been before the
Supreme Court for decision. We
will notice some of them. The
case of Bank of Commerce Us New
York, III Blacks Rep. 62S, decided in
1852, shows that the bank had inVes-
ted little more than SS,000,000 in
stocks, bonds, and securities, of the
/ United States, which in its Valua-
j alton had been included with other
property of bank for taxation under
the New York law.
The court again held that the
New York law was unconstitutional
and added that a state law for that
purpose is unconstitutional whether
it imposes the tax on United States
stock by name or included it in the
aggregate of the taxpayers property
to be valued like the rest at its
worth. ...
The tax power, so far as it is re-
served to the states and used within
constitutional limits, cannot be con-
trolled or restrained by the court,
the prudence Of its exercise not
being a judicial question. The court
also said this stock then is held by
| the bank the same as such stocks
are held by individuals and alike
subject to taxation or exemption by
state authority. I
The case of the National Bank oS.
the Commonwealth, IX.Wallace 353,
is case arising in Kentucky. That
state taxed the shares in banks and
required the bank to pay the tax on
these shares. The statement of the
case contains S. 40, of the United
States banking law in these words:
"That the president and cashier of
every such association shall cause
to be kept a correct list of the names
and residenceslof all the sharehold-
ers in the association and the num-
Der of shares held by each and such
list shall be open to the inspection
of the officers authorized to collect
taxes under state authority"
| ThenfollowS the prOviso in section
Al before given. The Kentucky |
law was in these words speaking of |
taxation: "On bank stock or stock in |
any moneyed corporation of loan or |
discount soc. on each share thereof
equal to 500 of stock therein owned |
by Individual corporations or socie- |
ties. 1t then goes on to say: "The |
cashier of a bank whose stock isl
taxed shall on the first day of July
IN each year pay into the treasury |
the amount of the tax due. If suchi
tax be not paid the cashier and his
Isureties shall be liable for the same
and twenty per cent. upon the am
cunt"
This was contested, but the Su-
preme Court held, Mr. Justice Miller
delivering the opinion, "In the sew
eral recent decisions concerning the
taxation of shares of the National
Banks, as regulated by sec. 40 and Al
of the act of Congress of June 8,
1854, it has been established as the
law governing this court that the
property or interest of a stockhold-
er in an incorporated bank, COM
monty called a share, the shares in
their aggregate totality, being called
sometimes the capital stock of the
bank held and owned by the cor
poration. This capital may consist
of cash, OF of bills and notes dis
counted, or of real estate combined
with these. The whole of it may be
invested in bonds of the govern
ment, or in bonds of the states, or
in bonds and mortgages. In what
ever it may be invested, it is owned
by the bank as corporate entity,
and not by the stockholders.
A tax upon this capital is a tax
upon the bank, and we have held
that when that capital was invested
in the securities of the government
it could not be taxed, nor could the
corporation be taxed as the owner of Il
such securities. On the other hand,
we have held that the shareholders
or stockholders, by which is meant
the same thing, may be taxed by