The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-04-13

encourage the organization of home in
surance companies by discriminatory
taxation it is, nevertheless a fact that
with all the discrimination in their favor
the entire capital of all the State in
surance companies is less than $500, 900
and they collect only per cent of the
amount of money paid for insurance pre-
miums in the State; while in the case of
banks we hardly believe any one will
contend that the percentages are not re-
versed and that not 6 per cent of the
banking business of the State is trans
acted otherwise than through banks or
ganized in the State.
RADICAL CHANGE NEEDED.
All this may be of slight interest and
it would not be mentioned except for
the fact that an effort had been made
to place me in an unenviable light with
the members of this organization. The
fact has been very evident, however, that
some radical change was needed in the
law taxing banks in this State The
section as it has stood has been a traves-
ty on equitable taxation, and has been
unintelligible to most tax officials. As
an evidence of this it is fact that the
assessed value of bank stock upon which
taxes were paid in the counties of the
State last year was SO, 500, $40 The same
banks paid the State tax on a valuation
of SIS, 600 while the actual value of
their capital and surplus was slightly
less than $S,000,000
In our city the three national banks
each paid their city and county taxes
in a different way. One bank paid on all
it's shares resident and non resident at
a valuation of one hundred dollars less
per share than its market value at the
time Another bank paid on the assess
ed value of it's shares, after deducting any
debts owing by the shareholders, which
debts were returned to the bank after
inquiry from the stockholders by the
bank The other bank did not pay the
tax at all, but let each individual share
holder list and pay taxes on his own
stock.
This was all caused by the indefinite
wording of the law and ought not to
have been possible.
If you will bear with me for moment
l would like to go a little further into a
comparison of the tax on banks and
State insupance companies so that you
may fully understand it. The State levies
d percentage tax on the gross premium
receipts Of all insurance companies. 1t
also requires an annual license -fee,-a fee
for examining the annual statement a
fee for advertising the statement, a fee
for every local agent in the State. and a
number of other smaller fees. These
fees and taxes are in lieu of all other
taxes and are paid directly to the State
Of course you can readily understand
that a company which has a large pre-
MUM income could very easily pay a tax
which, calculated as a percentage on its
capital and surplus, would be a much
heavier percentage than the regular prop-
erty tax. For instance the North Caro-
lima Home Insurance Company of Raleigh
which has about the same amount of cap
ital and surplus as the Carolina Insur
ance Company of this city, paid S926.S5
taxes in 1899 while the Carolina paid
$395.O1. The Wilmington Underwriters
of this city paid $Sk03 taxes, while the
Piedmont of Charlotte with $4,000 less cap
ital and surplus paid $23221 more tax, or
nearly four times as much. Calculated
as a percentage Of it's capital and sur
plus the tax of the North Carolina Home
was $1.3S while that of the Carolina was
slightly over go cents and the average
for years over 20 cents. The statement
was made in the previous meeting of this
chamber that the tax paid by the Caro-
lima Insurance Company was 1-24 per
cent of / per cent, You will observe
from the above that the statement refer
red to fixed the rate of tax of the Carolina
Insurance Company at just about lip of
what it really was, and that the state
ment therefore, contained about f-12 of
truth and HIP of error. Under the law
as It now stands the above percentages
will be nearly doubled without any in
crease in premium receipts, and if the
premium receipts should increase suffi-
GENTLY the tax might be much more
than the property tax.
If we compare these figures with the
taxes paid by certain banks we will find
that the discrimination in favor of State
insurance companies is not so terrific.
For instance if you will refer to the Au
ditor's report you will find that the At
lantic National Bank paid it's State tax
on valuation of 500 a share when it
was actually selling in the market for
$500. This was not on account as one
might suppose, of any discrimination in
the law in favor of banks, but because
some one when paying taxes construed the
law of 1899 which said "The stockholders
in every bank shall be assessed on the
actual value of the shares of stock for
the purposes of taxation for the State
to mean not what it said but that the
words, actual value when applied to banks
meant one half the actual value.
ANY one familiar with the national
banking act is aware that shares of
stock in national banks must be taxed
by the State as other moneyed capital
and also that the shares of stock held by
nom residents can only be- taxed at the
location of the bank. (Section 5219 Revis-
ed Statutes) Keeping this in view the
gentleman who drew up the section tax
ing banks levied the same tax upon all
banks, State and National. The revenue
bill requires that the State tax on the
shares of stock shall be paid by the bank
to the State Treasurer upon a valuation
to be ascertaiIed by adding together the
capital stock, surplus and undivided prof
its, and deducting from this the assessed
value of any real and personal property
which the bank shall have listed for tax
alton in the counties. Insolvent debts due
the bank may also be deducted from the
amount of surplus. For the purpose of
aiding the county commissioners in the
collection of county taxes. the State Au-
ditor is required 70 certify To the nou