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

and made to pay the debt
out of the means of its shareholder
under its control. This is, in effect,
what the law of Kentucky does
in regard to- the tax of the
state on the bank shares. 1t is no
greater interference with the
functions of the bank than any other
legal proceeding to which its BUSH
ness operations may subject it. and
it in no manner hinders it from
performing all the duties of financial
agent of the government.
Some of the cases referred 10 IN
8 Wallace cited above, are the fol-
lowing: Van Allen CS. The Assessors,
" Wallace 573. This case involves
the right of the states to tax the
shares of the national banks in the
hands of the shareholders, as per-
sonal property.
Van Allen owned fifty shares in
the First National Bank of the City
of Albany, New York, which bank
had at the time of the assessment in
vested its whole capital in various
obligations of the United States in
regard to all which Congress had
enacted that whether held by indi-
Yiduals, corporations or associations
they should be exempt from taxation
by or under state authority. The
court held that the act of June 3rd,
1854, before referred to, to provide a
national currency, ETC., rightly
understood, subjects the shares OF
the banking associations authorized
by it, and in the hands of the share
holders, to taxation by the states
under the limitations set forth in
Sec. Al, of the act, without regard to
the fact that part or the whole OF
the capital of such association is in
vested in national securities declared
by the statutes authorizing them to
be exempt from taxation by or un.
der state authority.
The court said the main and i'm.
portant question involved in anG
the one which has been argued al
great length and with eminent
ability is whether the state possesses
the power to authorize the taxation
of the shares of these national banks
in the hands of stockholders whose
capital is wholly vested in stock and
bonds of the United States. The
court are of the opinion that this
power is possessed by the states
The court then proceeds at great
length to give their reasons for this
opinion, and in page $50 use the
following language: 1.-The suggestion
is that it is tax by the state upon
the bonds of the government which
constitute the capital of the bank,
and which this court has heretofore
decided to be illegal. But this sug-
gestion is scarcely well founded for
were we to admit, for the sake of
the argument, this to be a tax on
the bonds or capital stock of the
bank, it is but tax upon the new
uses and new privileges conferred
by the charter of the association. II
is but condition annexed to the
enjoyment of this new use and new
application of the bonds. If Con-
gress possessed the power to grant
these new rights and these new
privileges. which none of the
learned counsel have denied, and
which the whole argument assumes,
then we do not see, but the power
to annex the conditions is equally
clear and indisputable. The tax is
the condition for these new rights
and privileges conferred on these as
sociations. In the case of Bradley
cS. the People, " Wallace $50, the
court again affirms the doctrine laid
down in the case of Van Allen US.
The Assessor, III Wallace, and re-
verses the decision of the supreme
court off Illinois, for no other reason
than that the act of that state taxed
the capital stock instead of taxing
the shares as the stock in the hands
of the stockholders.
The position is this: The general
government has permitted the shares
to be taxed, and have not permitted
the capital stock to be taxed. The
rule prescribed by Congress must be
pursued.
In the bank tax cases, II Wallace
200, the court held that a tax laid by
a state ON banks, on a valuation
equal to the amount of their capital
stock paid in, or secured to be paid
in, was a tax on the property of the
institution, and when that property
consists of stocks of the federal
government, the law laying the tax
is void. II
In conclusion, we are of the opin-
ion that railroads, railroad bonds,
q. C. NJ. L. stock, T.. c. NJ. 1. property,
shares in z. c. NJ. /. stock, all foreign
corporations doing business in this
territory, and having property here,
all corporations under our laws with
the shares of stock and their bonds
owned and kept here, are subjeet to
our laws. 81.
But as before said, taxation is sub
ject to legislative enaetments. How
this property shall be taxed is a
question to be. settled by the legis-
lature. -.a gro 5.-a ...1
National bank shares of stock may
be taxed here subject to the limita-
ton in the act of Congress prescribed.
And this is the only way these banks
can be taxed. In our opinion fur
ther legislation on this subject is
very desirable, and that the legisla-
ton on this subject should be such
as to tax this class of property in
such a way as not in legal effect to
tax it twice in the same year for the
same purpose. To tax the property
of any of these institutions at fair
cash valuation, and at the same time
for tie same purpose tax the shares
thereof in the personal property of
the shareholders, or in the hands of
the corporations, is in our opinion to-
tax the same property twice for the
same purpose.
Yours truly,
SNOW & HoGE.
Since writing the foregoing opin-
on, the case of the u. =. r. r.. CS.
Piniston, IS Wall 5, has been de-
,ided by the Supreme Court Of the