The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-04-05
AN ILL-COEsIDERED OPINION.

40 US AOho VI COCAbk
himself in print as is Encouragement
Smith, and who delivers an opinion
every time somebody winks at him is
very apt to make mistakes. The same
ray DO said of an executive officer
who has an irrepressible desire to exsr-
else legislative functions. Attorney
general Smith is very fond of rendering
opinions and making laws. His opinion
as to the liability of paid-up stock in
building and loan associations TO taxa
ton shows his weakness in this regard.
1t is a opinion, not called for
by any other State official, nor addressed
to any person in particular except to
whom it may concern.
The gist of the opinion is that paid
up stock in building and loan associa-
tions is taxable under the law because
it is q departure from the original idea
and purpose of such associations. which
was to enable -wage-earners, by small
weekly payments, to procure homes. 1t
is true that was and is the main pur-
pose of such associations. but there is
nothing in the law to prevent them from
changing the mode of payment and the
plan of operations. The question is
not whether such a policy is wise, but
whether it is legal. Mr.. Smith says:
"It is this very deviation from the orig
inal purpose of the law which, if not
checked soon, will at some time be the
rock on which a great crash will come
among the building and loan associa-
ions of b State" Suppose this to be
true. the Attorney-general is not called
wreck by formulating a law of his own
against what he conceives to be a dam
gerous practice. That should be left to
the Legislature, which, Mr.. Smith seems
to have forgotten, considered the whole
question at the recent session and re-
fused to enact q law making paid-up
stock taxable. Mr.. Smith seems to have
concluded to try and remedy what he
evidently regards as a mistake of the
Legislature by giving the present law a
new construction.
We are assured in this opinion that
there can be nothing palmer than that
money loaned to a building and loan as
ISOLATION, for which paid-up certificates
have been issued, is subject to taxation"
This begs the question. Those who diff
fer with the Attorney-general on the
subject would probably prefer a citation
of law to his ipse dirit. The law per-
mits a st0ckhOlder to pay d week. a
month, q year in advance, and the assoc
Citations encourage it; why not several
years in advance, or the whole amount
in one payment? The law does not
make nor authorize any discrimination.
The question is not what it should do,
but what it does.
The holders of paid-up stock in these
means. The smallest amount of paid
MP stock is held by capitalists. The
largest class Of paid-up stockholders
consists of men of small means who,
having a few hundred dollars which they
want to use az a nest egg and nucleus
for a building fund, buy as many shares
of paid-up stock in a building associa-
tion as it will carry through with the
aid of the accruing dividends. In this
way they make all their payments at
ono instead of spreading them over o
term of years. The Encouragement
tries to draw a distinction between this
class of stockholders and those who
take out certificates of full paid stock
and thereafter draw interest instead of
dividends. The distinction is arbitrary
and not authorized by the law.
The Encouragement has not always
been of his present way of thinking on
this subject. A little more than a year
ago he rendered an opinion, in response
to a request by the Auditor of State, in
which he too the ground that paid-up
stock in building and loan associations
stood on precisely the same footing in
regard to taxation as stock on which
the payments were made weekly or
monthly. This is why we say that an
official who delivers so many opinions
must make some mistakes. One of the
two opinions which the A~ttorney-gen-
eral has delivered OF this question is
dead wrong, and the Journal is of opin-
ion that it is the last one. He had bet
ter stand by the law and not override
himself.