The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-05-30
NATIONAL BANK TAXATION,
Acknowledgement FitzgeraId's
Opinion as to Assess
mentS.
A QUESTION OF THE BONDS
The Assessment Of National Banks
VIII Have to Be JudICially
Settled.

dispatch in yesterdays CALL states
that the State Board of Equalization now
| in session in Sacramento, is struggling with
communications from county assessors
These are inquiries as TO whether they shall
act under the opinion of Attorney General
Fitzgerald relative to assessing the National
banks.
Attorney Fitzgerald states that the mat
ter will no doubt have to be judicially
settled. He has had many applications
deep interest throughout the State, and
which is as follows:
SAN Francisco, May 81, 1895.
j. F. Campbell Esq, assessor of StdniSLdus
County, Modesto, Cal.-DEAR SIR: l have given
q thorough examination and most careful
consideration to the law bearing upon the
question of the assessment of National bank
stock held by individuals The question is a
very difficult one, and one upon which it is
hard to arrive at satisfactory conclusion, in
view of the policy of our State in the matter of
assessing shares of stock in corporations Such
shares are specially exempted from taxation by
section 360S of the Political Code, the ground
that they possess no intrinsic value over and
above the actual value of the property of the
corporation which they stand for and repre-
| sent, and the assessment and taxation of such
shares, and also of the corporate property,
would be double taxation"
/ am of the opinion, however, that as the
quire that at least one-third of the capital of
National banks actually paid in must be in
vested in United States bonds and deposited
with the Treasurer of the United States (Sec.
5119 Rev. Stat. U. y, and as the capital stock
so invested and deposited is especially ex-
empted from taxation by or under State, or
municipal, or local authority (Sec. 370l Rev.
Stat. U. 81, the reason given in Section 360S of
our Political Code for not assessing the shares
OF stock of a corporation cannot be invoked in
favor OF so much at least of the shares OF stock
OF a National bank as is equal in value to that
portion of the capital stock which is invested
in United States bonds.
Therefore, should advise the assessment of
the shares of stock of a National bank owned
by individuals at their actual value after de-
Quoting therefrom the pro rata value OF the
property OF the bank other than that invested
in United States bonds. Such would not in
my opinion, be double taxation; at all events
it is a question which should be judicially de-
termined.
In making the assessment you must be
guided by the provisions OF section 5219 of the
Revised Statutes of the United States. which
make the assessment OF such shares subject to
two restrictions, viz: "That the taxation shall
not be at a greater rate than is assessed upon
other moneyed capital in the hands of indi-
vldual citizens of such State. and that the
shares OF any National banking association
owned by non residents OF any State shall be
taxed in the city or town where the bank is
located and not elsewhere" Respectfully
w. T. FITZGERALD,
Attorney General.
The position of the Attorney General in
this opinion is not opposed to the provis-
ions of section 360S, Political Code, which
provides that the assessment of the shares
| OF stock held by individuals is double tax
| alton. That section which is quoted in
the opinion very clearly states the reasons
why such an assessment of the stock is a
double assessment, viz, because the stock
only represents the property owned by the
corporation, and to assess that property
and the stock also would be double taxa
ton. In the case of National banks how
ever, the reason fails to the extent stated
in the Attorney-General's opinion; and in
view of this fact the provision of the Sec
ton exempting shares of stock from taxa
ton cannot be invoked in favor of the
shares of National bank stock to the ex-
tent that the property represented by them
is invested in United States bonds which
are not assessable. In other words, where
all the property of a corporation is as
seSSed and the shares are assessed the as
sessment of the shares is double taxation.
Where a part only of the property is
assessed and the shares are assessed the
assessment of such shares is double taxa
ton to limited extent only.
Finally If certain proportion of the
property OF corporation is non-assessa-
bic and a like portion only of the value
of the shares of stock is assessed this would
Therefore, if the property of a National
bank is valued at 500, 900 and $4,000 of
that property is invested in United States
bonds, which are not assessa BILE, and the
bank is assessed only for the remaining
$4,000 of its property, then the assessment
of the capital stock of that bank at half
of its actual market value would not be
double taxation and would not fall within
the reason of section 1908, Political Code.