Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1881-10-05

Renders q Decision in kesara 10 inc
TAXATION Of Bank Deposits.

WASHINGTON, Oct. 4. Commissioned Kaum
rendered the following decision IN feiauo" "
,axation on banks and bankers:
Whereas deposits are made OF ur..e =.
.hecks- which are Immediately carried 20 tne
credit of the deposition, and which are suoJec.
=, once 70 payment by check or draft, they
mnst he treated as taxable deposits on the
dav the same are received and entered 10 tue
credit of the depositor. But, in the ADJUST
inc of the daily balance of deposits, clearing
hou.e settlements will berecognized, and banks
and bankers will rectify the balances appear,
ing on their books at the close OF each uAy
business, by deducting the amount OF cheeAs
received from the clearing house eacu lii1'n
ing, treating such checks Is thougn NV ,,a
been received and charged up oelore ''ie
close of business on the previous uas'
when bankers borrow money upon
tho nleaoe of stocks or bonds. for the
purpose of completing payment for the same
stocks or bonds. the money so received can
not be treated as deposit within the meaning
nj the statute. Where the banker receives
money for immediate investment IN bonds
or STOCKS. either in partial or full payment
for same. and such money is not invested tiie
day it is received, or on the day following
il is not a deposit; but where money Is
received for further investment IN pohus vi
stocks il would be subject to the order OF the
customer and must therefore be treated as
deposits. subject to taxation. Where 'he
banker sells bonds or stocks received from
or held by him for customer, and RENTS tne
proceeds on the day the same are received
or the day following, the amount Is mol ue,
post: but where such proceeds are carrieu
TO the credit of the customer and held SUP
jecrto his check or draft, such money Is
deposit, subject to taxation. Where money
checks or drafts are received by bank or
banker and carried to the credit OF the per-
son delivers the same, or for whose use same
are delivered, they become and are deposit
in the hands of the bank or banker, and II
subject to check, or draft, or payment on
the returns of a certificate of deposit, or other
evidence of debt. they are deposits, subject TO
taxation, whether the money be payaoie on
denosit. or at some future day, with or with
out interest and whether the depositer De
secured BY collaterals or not, but where the
bank, which BY its charter has authority to
borrow money, or private banker goes INTO
the market and negotiates tor and borrows
money to secure the payment OF when notes
given on bonds or stocks pledged. the money
so obtained is not deposit, and is not SUD-
ject to taxation as such.
Deposits made with bank or banker, ana
mixed with other fundS Oh Tue oaih. aie"ouS :"
received for special purposes, such as Tor
instance: To pay dividends; interest on
coupons or to provide for other payments.
are subject to taxation. But special deposit
to money held intact, to be returned 10 the
depositor. is not subject to taxation as de-
post. Banks and bankers when making up
their returns for taxation, are not entitled TO
deduct from the balance Of the deposits
shown upon their books, the amount OF
money in their possession and not invested 'or
amount of money re-deposited with other
banks or banking business. The business OF
broker is to negotiate purchases or sales OF
stocks and bonds. exchange bullion, coined
money, bank notes, prOmissory notes or other
securities. He takes no possession, as a
broker, of the subject matter OF the neso-
tiations. Every person, firm, or company,
having a place of business where stocks,
bonds, bullion, bills of exchange, or promis-
sorry notes are received for discount or sale,
is regarded in law as bank, or as banker,
and the capital and deposits of such bank or
banker are subject to taxation as provided
in Sec. 3, 40S U. S. Revised Statutes. Where
checks or drafts are received for collection
and remittance, are collected and RENTED
for the following day. the collections should
not be treated as a deposit, but where money
collected is held by a collecting bank and re-
mitted at a subsequent time, during the
period it is so held, it should be treated as a
deposit.
(Signed) G. b. RAUM, Comm.