The Pickens sentinel. [volume] (Pickens, S.C.) 1871-1903, 1891-02-26
TAXING BANK STOCK,
SHALL THE STATE BANKS BE TAXED
OUT OF EXISTENCE?

tho Mat,er-A Statomont from tho
Comptroller Genorals Ohcs Regarding
tho Connor Letter.
COLUMBIA, S. c., February H.
Some interest has been created in
banking circles in regard to the construc.
ton OF the law governing the taxing of
bank stock and the manner of returp ,
TO be made by banks. Some davs ago
MIR. ". Nj. Connor, President of the
American Savings Bank of Charleston,
wrote TO the Comptroller General let
ter OF inquiry in regard TO this matter,
and was replied to by Chief Clerk Nor
ton under the instruction of the Comp
troller General.
The Sunday News of the 18th inst.
publishes an interview with Mr. Connor,
III which he makes the following state
ments concerning his letter and the re-
ply received by HIM from the Comptrol-
Ter Generals Office:
MY letter has not been answered, |
Wrote upon an entirely different matter.
BY way OF illustration let me show you
ABOUT what | wanted to find out. Sup
pose on the 81 st of December any bank
SHOWS that 1t has made $4,000. On the
!st OF January the bank pays $500 IN
dlVldends to its stockholders and its ex-
penses have been $4,000 for interest and
running expenses. l wanted to know
whether taxes are TO be paid by the bank
ON the $l2, 900 or on the net surplus and
undivided profits Of the bank on the 1st
ofJanuary. l have not been answered
on that question.
''1n one paragraph of the letter Mr..
Norton says Suppose the shares of
your bank to be worth on the markets in
Charleston 5000 per share, the par value
being 800, your return then would be
$50 shares at 5000, or 100000; > and
then he says: ''It is the duty of the Au-
dltors TO ascertain the real money value
OF all bank stock and where not correct
ly returned Oh the tax books at the real
market value
'What is to be understood from such
statemcnts? In one place he wants the
real value OF stock taken as a basis for
returns, and then he says returns are to
be made Oh the basis of the market val
ue OF stock. Two quite different things.
Some time ago our stock was selling at
$lG5. MIR. Marshall called on me, and
l told him that the books would not
show the stock to be worth over $145.
Does he want 10 tax us on the 500,
which Is merely fictitious valuc?'
ut shows confidence in bank, and
Is this confidence to be taxed? Yet, Mr..
Norton says the returns should be made
Tor what the shares are worth on the
markets. A bank cannot be responsible
for the market value of its stock.
IL have no intention of answering the
mine. The stock of an old bank, when
It's stock runs up to $500 or $400, is diff
ficult to sell for more than it's true value,
because banks seldom pay over 10 o. 12
per cent. interest, which means only 3
or percent. 20 those who buy the stock
at $500 OF $400 when the par value of
the stock is only $lOO."
yesterday The Register reporter in
tcrviewcd MIR. Norton on the subject of
MIR. Connor's statements, and Mr.. Nor
ton said, that the letter referred to by
MIR. Connor was to all intents and pur-
poses the Comptroller Generals letter,
as he simply acted in his clerical capaci-
ty, signing it "W. II. Ellcrbe, Comptrol-
Ter General, per Norton" lie then
added: "As Mr.. Conner says the
comptroller General did not answer his
letter, we give them to the public"
CHARLESTON, S. g., Feb. -, 1901.
Hon. W. II. EUer6e Comp. Gen.
DEAR SIR: Wishing to comply with
the requirements of the law. write you
for information. AS | understand. we.
tAe banks, are to return and pay taxes
on the capital stock and on the net sur
plus we have left on January lst, after
we have paid the interest due to the
depositors to that date and expenses of
business deducted from what we have
made then the net surplus and capita!
stock. Thisis the way construe. Am
not correct? Please write me at once.
See on back Thank statement 1 enclose.
Yours truly, w. M. CoNNOR.
surplus and undivided profits SIP, 146 94
Expenses and interest paid
depositors s................. 1896 4G
,o :. s $3.50 4s
January dividend, paid stock
hoiuoIS. ................. $S 800 OO
Surplus, lst January, 1891. 81, $50 4s
The above is true.
II. M. MCTUREOus, Cashier.
"Ihe Comptroller General took #
mat Mr.. Connor sought information and
LOOK pains IN replying to him. The
comptroller had the construction of the
law by the Attorney General, and simply
gave, as he thought under the law, the
information desired. That is, that the
panK must return TO the Auditor nj the
shares OF sad bank, with the names OF
Inc owners of such shares. assessed ot
their true value in money! If Mr.,
Connor II ID taken pains to read Sections
1913, l99, 200, POI, 2O2, 2O3, 2O4 and COZ
OF the General Statutes, he never woulG
have said that the Comptroller General
had not answered his letter.
''The law is plain that the banks ot
this State pay taxes on only their shares
assessed at their true money value.
Their furniture, real estate and surplus