The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1899-08-11
ATTY GEMS SAY.
Sustains County Attorney
Hughes Position.
Important Ruling in Regard to Taxation
of Banks and Building and Loan
Associations.

TO thirty OF IOrIy PERSONS VINO mdue
affidavit that they were unjustly as
sessed on mortgages, etc. The board
took no action, but will meet again
tomorrow.
The attorney generals written
opinion was received on the five ques-
ton submitted to him by the county
attorney, and is favorable to the con-
tention of the banks and building and
loan association. 1t is as follows:
ST. PAUL, Aug. 3rd, 1899.
THOMAS HUGHES, ESQ,
County Attorney,
Mankato, MINI.
DEAR SIR:-In your recent inquiry
you request my opinion upon the fol-
lowing questions to-wit:
1. Are savings banks organized un-
der the laws Of this state liable to taxa
ton on deposits which have been made
with them and by them loaned out on
real estate mortgages?
2. Is a state bank organized under
the laws of this state liable to be Gaxed
for deposits which have been loaned by
by 1t on real estate mortgages, and
which has not been otherwise taxed?
3. Do the words 'by other parties"
in the item designated 7th in sec. 1881
of @. S. in 1894 when applied to a saw
ings bank refer to other parties than
the corporation itself, or do they mean
other parties than the trustees or pro-
meters of such bank?
4. Are local building and loan asso-
Citations liable to taxation upon their
mortgages or their stock, or should such
stock be taxed under the statues to the
owners thereof?
5 Does the requirement of sec. 1927
of G S. of 1894, that person, officer or
agent of a corporation shall make an
affidavit that all moneys or things for
which deductions are claimed are given
for bona fide consideration, and shall
also contain the names and residences
of the payee holding the obligation for
which such deductions are claimed, APP
ply to banking corporations and build
ing and loan associations SO as to COM
pei them to disclose who their de-
positors are?
beg to say in answer thereto that, in
my judgment, the fact that the money
referred to has been loaned upon real
estate mortgages can have no bearing
whatever upon any of the questions.
Such loans are made from necessity out
of either the capital stock or deposits of
the banks and the method of taxation
provided by the legislature is that such
property shall be taxed as capital stock
against stockholders and in the form of
deposits against the individual deposi-
tors. To again tax the same under the
guise of loans will clearly be double
taxation and in violation of the consti-
tuition. A different rule might apply as
against corporation in which the CAPT.
tai stock is taxed against the corpora
ton proper and in specific instance
had been omitted from taxation under
the principle of the case of estate VS..
Redwood Falls Building and Loan As
ISOLATION" Under the terms of sec.
1915, chap. II of the G. S. of 1894, it
may be inferred that the legislature in
tended that moneys on deposit in any
bank should be taxed against the de-
position.
First. Your first question must be
answered in the negative. 1t will be
noted under the terms of sec. 1881 of
the G. S. of 1894, the legislature has
provided in paragraph 18th in the assess
ment of savings banks, for deducting
the amount of all deposits made with
them by other parties" from the
general assets of the bank including
capital invested covered by LIST. I'd, Sd
and 4th items in the section referred to.
Second, Section 1882 provides for
the assessment of the properties refer
red to in your second inquiry, to-wit:
That all banks whose capital is repre-
sented by capital stock. This section
clearly provides for the assessment of
such assets against individual stock
holders of the bank and not for an as
sessment of any nature against the
bank proper except real estate, ETC.,
owned by the bank. It will be noted
also that the amount of the invest
ments of the bank in real estate shall be
deducted from the total amount of the
capital stock and surplus funds in de-
termining the amount of the assess
ment to be made against Individual
stockholders. Inasmuch as deposits in
banks are assessable against individual
depositors, and chapter II does not
provide for the assessment of the assets
of this class of banks in any manner ex-
cept as above indicated in section 1882,
it follows that no provision has been
made by the legislature for taxing the
deposits in such banks upon assessments
made directly against them.
Third. The term by other parties
used in sec 1881 must be deemed to
mean parties other than the corpora
tion.
Fourth. In my Judgment (replying