The Portland daily press., 1881-10-05
BANK TAXATION.
An Important Opinion by Commissioner
Ra11r1n

An Important Opinion by Commissioner
Raum.
WASHINGTON, Oct. A. Commissioner Raum
has rendered the following decision in relation
to the taxation of banks and bankers:
Where deposits are made of checks or drafts,
which are Immediately carried to the credit of
depoSitors, and which are subject at once to
payment BY check or draft they must be treat
ed az taxable deposits ON the day the same are
received and entered to the credit of the de-
positor, but in adjusting daily balances of de-
posits clearing house settlements will be recog-
nized and banks and bankers will rectify bal
ances appearing on their books at the close of
each days business, by deducting the amount
of checks received from clearing house each
morning, treating such checks as though they
had been received and charged up before the
close of business on the previous day. Where
bankers borrow money upon pledge of stocks
or bonds for the purpose of completing pay
ment for the same stocks or bonds, the money
so received cannot be treated as derost with
in the meaning of the statute. Where banker
receives money for immediate investment in
bonds or stocks, either in partial or full pay
meut FOR the same, and such money is so in
vested on the day it is received, or on the fol-
lowing day, it is not deposit, but where
money is received for further investment in
bonds or stock, it would be subject to the order
of the customer and must therefore be treated
as deposit subject to taxation Where
held by him for customer ands RENTS the pro-
ceeds on the day the same are received, or the
ft flowing day, the amount is not deposit;
but where such proceeds are carried to the
credit of customer and held subject to 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 credit Of tho person who delivers the
same, or for whose use they are delivered they
become and are deposit in the hands CT the
draft or payment on return of certificate of
deposit or other evidence of debt, they are
deposit, subject to taxation whether the money
be payable on demand, or at some future time,
with or without interest, and whether the de-
positor be secured by collaterals or not
But where bank, which, by its charter, has
authority to borrow money, or private bankers
go into the market and negotiates for and
borrows money to secure the payment for which
notes are given, or bonds or stocks pledged,
the money so obtained is not a deposit and is
not subject to taxation as such Deposits
made with bank or banker, and mixed with
other funds of the bank, although received for
special purposes, such as for instance to paw
dividends or interest coupons, or to provide for
other payments, are subject to taxation. But
a special deposit of money held intact to be re-
turned to the depoSitor, is not subject to taxa
tion as deposit.
Banks and bankers, when making up their
returns for taxation, are not entitled to deduct
from the balances of the deposits shown upon
their books amounts of money in possession
and not invested, nor amounts of money rede-
posted with other banks or bankers. The
business of broker is to negotiate purchases
or sales of stocks, bonds, exchange bullion,
coined money, bank notes, promissory notes or
other securities. He takes no possession as
broker of the subject matter of the negotia-
ton. Every person, firm or company having a
place of business where stocks, bonds, bullion,
bills of exchange or promissory notes are re-
ceived for discount or for sale is regarded in
law as banker, and the capital and deposits
of such bank or banker are subject to ia xation
as provided in section 3408, United States Re-
vised Statutes. Where checks or drafts are re-
eeived for collection and remittances are col
lected and RENTED for the following day the
collections should not be treated as a deposit,
but where money collected is held by the col
lecting bank and RENTED at a subsequent
time, during the period it is SO held it should
be treated as deposit
GREEN B. RAUM, Commissioner.