The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1883-10-29
TAXATION OF BANK sroCK.
Judge Howe's Railing in the Case of Stock
holders Against the County Treasurer.

On Saturday Judge Howe made a ruling in
the case of the First National Bank vs.. John J..
MOthershead, the points in which have excited
considerable interest in banking circles. This
was a suit brought against defendant, who was
then treasurer of the county, to enjOin the col
lection of taxes assessed against certain of its
stockholders, upon the ground that the assessors
had refused to allow them to deduct from the
value of their stock she amount of their indeht-
edness. The demurrer to the complaint was
sustained by Judge Howe, the following being
an abstract of the opinion: e
Wherever illegal discrimination has been
made by State laws or officers against the stock
holders of a national bank in the assessment of
taxes, a suit to eDjOin the collection thereof may
be maintained by the bank In behalf of such
stockholders. t105 .. s., 319).
Section IS of the tax act of 1881 restricts
both the credits from which debts are to be de-
Quoted and also the debts which are to be de-
d Icted. The restrictions on credit are contained
in the first clause, ending with the word
"interest," which provides that no person, COM
pany or corporation shall be entitled to
any deducrlon on account of any kind of debts,
from, first, bonds; second, stocks; third, money
loaned; fourth, money at interest. The remain
der of the section defines the debts on account
of which deductions are to be allowed or, Ito
speak more precisely, defines the several kinds
of debts which are not to be deducted from cred
its of any kind. These are: First, bonds, notes,
or Obligations of any kind given to any Insurance
company ON account of premiums or policies;
second. unpaid subscriptions to any religious,
literary or charitable institution or society;
third, subscriptions to, or installments payable
on, the capital stock of any company, whether
Incorporated or unlncorporated. That is to say,
from so much Of his "money ~capital' as is repre-
scented by "bOnds, stocks or money loaned, or
money at interest" the taxpayer ia forbidden
to deduct any indebtedness of any kind. From
his credits other than "bonds, stocks or money
loaned or money at interest" he may deduct his
bona fide Indebtedness except sucn part of ii as is
| represented by insurance obligations, unpaid
religious, ETC., subscriptions, and subscriptions
to capital stock. etc, and this part he is forbid
| den to deduct from his credits of any kind. The
word "credits" in clause 81 of the schedule
means credits otler than those excluded in sec
ton 60, and the word "Indebtedness"m means in
debtedness other than that excluded in section
65. III Ind, 512, and los U. s., 1872, dis
tinguished)
The owner of national bank shares cannot
complain because the owners of some kinds of
| money capital have some advantage over him in
the matter of taxation. He must show that the
State law or the State officers have favored other
money capital in general, or such a considerable
part thereof in such a way or to such an extent
as to evince a discrimination against him. (23
Wallace, $780,; 90 L. s., 10; l01 Mass, $3.50
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