The Lambertville record. [volume] (Lambertville, N.J.) 1872-1968, 1897-11-03
TAXING BANK STOCK.



not only heartily meets their approval
but which it is thought can be put into
effect without arousing the opposition
Of former proposed reforms in this
line.
Under the existing law, bank stock
in the State is assessed and taxed in
the municipality in which ii is held,
except in cases of nonresident holders
Of stock, when ii is assessed in the
same taxing district as that in which
the bank is located The bank, in such
cases, pays the tax, which is deducted
from the dividends of the parties hold
ing the stock Former efforts to modi-
fy this system SO that the bank stock
should be assessed in the municipality
in which the bank is located have met
such determined resistance on the
part Of residents of the rural districts
that they have always failed.
That those efforts have been 50 fire.
quently made is due 10 the fact that
under the present system large pro-
portion Of bank stock escapes taxation
entirely. 1t is estimated that not more
than one-third of the total bank stock
i'll the State is now taxed. The signif-
canoe of this as problem of taxation
is readily seen when it is considered
that the capital stock and surplus of
| the National and State banks and trust
companies doing n banking business
IN New Jersey amount to nearly $50,
600, 900.
The reason TINT attempts to change
the present system have met with such
opposition from the rural districts is
that the residents in such districts pre-
fer to allow large proportion of the
bunk stock to escape taxation than that
they should give up the benefits they
have derived, from the fact that often
the holders of bank stock live in some
township or borough where no bank
~ located. Much of this bank stock
escaped taxation because the holders
fmled to make 1t report of it to the
assessors, and there was no other
means by which the assessors could
ascertain whether there were property
owners. in their jurisdiction holding
stock, except from voluntary state
ments of the holder himself or by Sc
curing the desired information from
the assessors of the municipality in
which the bank was located. As this
was purely gratuitous task so far ms
the assessors were concerned, it was
almost always poorly performed or was
practically not performed at all.
Substantially the recommendation
which it is proposed to make in the
report to be presented to the Governor
next week is that the chief financial
officers of the various banks shall fur
rish to the State Board of Taxation Il
list of all the stockholders, with then
residences and amount of stock held
by ench. The plan is that this infor-
nation may be furnished to the local
assessors through the State Board. 1t
Will also be recommended that bank
stock shall he assessed in uniformity
with the other property in the districts
III which the assessments are made.
The object of this latter recommends
ton Is to prevent the great disparity
that has existed in the past between
the assessed valuation placed ON bank
stock and that on other property.
\ Few months ago the State Board
mad an example of this in II Paterson
ease. which came before it for review,
In winch the holders of stock in Pater-
son banks objected to the valuation
placed ON their stock 10y the Paterson
assessors. When the matter was
argued before the State Board, briefs
were submitted by counsel for the
stockholders, in the contentious of
which the Board fully concurred. Ii
was shown that other property in Pat
erson was assessed nj sixty per cent.
OF Its true value. and it was held that
the same practice should he employed
IN taxing bank stock.
N best it is difficult matter to ar
rive At the value of bank stock for tax
ing purposes for it is neither assessed
nj ITS tull or proportionate par value
nor at its market value. In determin
ing the basis of assessment the capital
stock and surplus of the bank ARE tax
en- and the real estate, the tax ON which
Is paid whore it is located. subtracted,
together with. the government bonds
and other securities that under the law
are exempt from taxation The value
OF the stock for the purpose of taxation
is represented by the remainder.
In the latest convenient report of the
Comptroller of the Currency it is
shown that the capital stock of the
national banks of New Jersey is Sl4.
5's,35O, and the surplus S1,S15, 0o3. Al.
making total of So. 453. 313.4t There
are TOE of these banks which ms mat
ter OF fact own also an immense auanti-
1 ~ of real estate. The national banks
of the State alone hold 81, pa, $50 in
Government bonds, besides large
amount III municipal bonds, which are
also exempt from taxation. The com
bined capital stock and surplus of the
State banks is 81, 600, 600, and Of the
trust companies 80, 500, 600. These also
hold a large quantity of securities
which are exempt from taxation and
i Still further reduce the amount ON
which the stockholders can be com
PEELED TO pay taxes
All these facts have been duly consid-
cred by the State Board in forming its
recommendations, and il is anticipated
that there will be some legislation ON
the subject introduced at the session
of the Legislature, The matter of the
stockholders being entitled to redue-