The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1893-04-05

communication is an important one, and
Is as follows:
deem itexpedient. for the purpose OF aiding
tax assessors and other officers in the perform-
ance of their duties. 10 call their attention
TO the law as applicable to these associations.
as follows:
l. How is the stock of a building and loan
association 10 be assessed?
2 What moneys properly enter into the item
dts,ribed In the law ''the amount shown TO
have been paid into said soeiauon up 10 said
first day Of April upon outstanding spares OF
stock from which is to be taken the amount
loaned to shoreholders%
3. Under the law what character of loans are
properly deductible from the amount of money
paid to the building and loan associations for
the purpose OF sscer'aning the balance subject
10 taxation?
for money loaned to it. and upon which interest
is paid, generally denOminated paid-up stock.
subject 90 taxation?
.. is the holder of @ certificate of paid-up
stock IN legal lense a shareholder or en-
ttied to receive any OF the profits OF said $500
citation further than the interest stipulated?
q. is the stock of bona fide subscriber to a
building ana loan association which has been
paid up wholly or partially in advance OF the
usual as sessmen Mt instead of being paid in week
ly or monthly iastaliments, to be considered as
other stock OF the association and taxed in like
manner?
Z. How ia the stock of a bona fde share
holder II such an association of some county
in the state of Indiana, other than the one in
which the holder OF such stock resides, to be
assessed?
s. How is the stock of a bona fde share
holder in building and loan association. organ
lied under some state other than Indiana, 20
be assessed?
no law was passed in 1898 affecting the tax
etiOn OF building and loan associations.
Senate bill No. Isl which became law, pro-
vides for the regulation and supervision OF
foreign ard domestic building. loan fund. saw
iugs or investment assoc atoms. ana requires
them 10 make and file ste ements OF the con-
dition OF its affairs with the auditor OF state.
! and authorizes examinations 10 be made OF the
same, and prescribss penalties for the violation
| OF its provisions. This law goes into operation
April /. 1898.
No law which finds place among the stat
utes of Indiana was designed TO accomplish
greater good 10 the people, and especially those
among the poorer classes, than the original cot
authorizing the formation of building and loan
associations It's real purpose was to enable
wRge-earners, by small weekly payments, TO
procure homes The very language OF the
amendatoTy act Of 1877 is "that the company
shall have the power aud franchise of loaniog
or advancing 10 the stockholders thereof the
/ moneys accumulated from time 10 time and
| the power and right to secure the repay
/ ment of such moneys ETC." The law
| plainly and undenably was intended TO be
confined TO bona tide shareholders, out OF whose
| accommodations only homes might be built and
! upon which mortgages should be given TO se-
| cure the repayment 70 the association of the
money advanced for that purpose. Is was not
| INTENDED, nor has It the support OF the law
now, that such associations should engage In
! the general business OF banking and afford al
| opportunity to money lenders by which their
| wealth can be placed IN such . manner as to
earn large profits and at the same time escape
| Il ia - AurTf h.
! original purpose of the law. which. If not
| checked soon, will at some time be the rock on
| which great crash will come among the build
ing and loan associations Of the state.
The information desired in answer to the
| questions above propOunded may be best given
/ in the order of the questions asked.
Building and loan associations are taxed ac-
! cOrdng to the terms OF sec. 80 of the general
tax law Of 1891, which provides that before
/ the first day of June of each year the seere-
| taTy of every building. loan and savings osso-
citation shall file with the auditor OF the county
! in which such association organized a
duplicate statement verified by said secretary,
| showing the amount paid into SAID association
| by shareholders upon their shares OF
| stock issued by il up to the first day of
| April preceding and then outstanding, and
| also the amount loaned up TO said date 10 share.
| holders and secured by mortgage upon real es-
/ tate licted for taxation. ABd the auditor shall
/ deliver this statement to the proper assessor,
| who shall proceed TO assess said association for
| taxation with the amount shown 10 have been
! paid into said association up to said 1ss day of
! April upon outstanding shares of stock, less
! the amount shown by the statement 10 have
/ been loaned TO shareholders upon said mort
gage security so listed Tor taxation, and neither
| said association nor the shareholders therein
! shall be liable 10 other taxation upon said
shares of stock.
| The phrase "the amount shown TO have been
paid into said association" embraces the dues
/ paid by bonn fde shareholders together with
! ell items of premium on stock, interest and
/ fines the latter item being much part of
| income of the association as the dues them
selves. The above phrase does not cover, nor Is
| IL intended to embrace money which the asso-
| cation has borrowed and for which il has given
| its paid up certificates, in much ueh Ger
! tifcates should be listed and assessed against
their holders precisely as other personal prop
| erty Is assessed.
| Only such loans should be deducted from
| the amount paid 10 such association, as above
| stated as are secured by mortgages upon re al
| estate which has been listed and returned for
taxation. The justice and logic of this is plain.
! The purpose OF allowing = deduction Is to
make il possible for the bona hde sharehold-
| ers who have drawn out money for the pur-
/ pose OF building homes, to avoid paying taxes,
| both on such homes and the stock either IN
| their hands or the hands of such associations
| itself. IL could not be known, therefore,
| whether money which had been drawn out
upon pass books or personal or other security
| had been invested In property listed for taxa
| ton or not. and so both q matter OF safety to
| such associations in confning them to the best
/ class of security for loans and to enable the
/ owners themselves, who have invested such
! loans in building homes, to have the benefit OF
such exemption, the law provides "that
/ there shall be deducted from the amount paid
! into such association only the amount shown
by the statement 10 have been loaned to share
holders upon said mortgage security so listed
| for faxation.
Within the past few years, as above indi-
| GATED, large money lenders OF the state have
undertaken to use the laws governing building
| and loan associations as a means OF making
| large profits upon their money, at the same
time avoiding the payment OF taxes and while
| they have succeeded N their efforts in many
counties OF the state, il has been ana still con-
| tinues TO be done in clear violation OF the law.
| IL is the duty of county and township assessors
everywhere throughout the state 20 obtain
| from the officers of building and loan associa-
tions the names of persons TO whom paid up
certificates OF such associations have been
issued and to place such certificates upon the
assessment lists to the several persons holding
| them. There can be nothing palmer than that
! money loaned 20 building and loan assoc O.
| tion, for which paid up certificates have been
4 issued, is subject to taxation. Such certificates
are nothing more nor less than promise 10
pay, and like any other pTomlssory
note, are subject TO taxation the
same as other personal properly.
In many instances these certificates
bear 6 and s per cent. interest in addition 20 a
| partc patton in the general profits of the asso-
| should not be allowed 10 enjoy any OF the
! ---a6a. af The isafiAa hauand fnta 81