New-York tribune., 1902-07-04
SAVINGS BANK TAXES.
STATE CONTROLLERS REPORT IN RE-
GARD TO DIVIDENDS.

Albany July 3.-Nathan L. Miller, the State Con-
troller, made the following statement tonight in
regard TO the reports in relation to the taxation Of
the dividends Of savings banks:
There is a great misapprehension on the part OF
the savings bank officials the attitude Of this
department this question. The department in
were levied did not include dividends; neither is
II the purpose to include such dividends in fixing
the assessment this year, is IL the policy Of the
state TO tax dividends paid to deposit0rs II.
NeW-York to obtain a construction of the law In
the courts. On their application for revision be-
THAT the law is Unconstitutional: that interest
accrued but not yet due should not be included
provides that the tax shall be on the surplus and
owned by The bank having a market value above
par should be assessed at par, while securities haN
their market value: that the real property of the
bank consisting OF the real estate used f0r & oanH hne
erected should be assessed not on the basis OF the
cost of the property but upon the basis Of which
the material would he worth torn down, on the
theory that the property is only available Tor bank
ing purposes and that its market value must there,
fore be determined from the value of the land and
the materials in the building junk"
These contentious were overrued and the tax
airmed Fer the PURPOSE Of presenting an oI OIL me
counter application TO increase the assessment by
adding the amount of dividends declared but not
and the determination Of the Controller is now
under review In oertorari proceedings institutes @
The ouestioe involved in the coostruction of this
law and II was for this purpose that the proceed
ings take1
In the blank forms or reports formerly sent to
the banks they were required TO report in TWO
groups the resources and liabilities of the bank
In view of the controversy a to what were re-
sources and liabilities this changed to
the form them in which specific ques-
lions were asked with a view OF disclosing all the
data necessary to enable the Controller 10 hX the
tax. From this il has been assumed that il is
the intention OF the department to tax dividends
This assumption is entirely erroneous. but in view
Of the contention Of the banks that while interest
accrued hi not due should not he treated as an
asset, that dividends declared but not yet pay
ri hel = a
the department concluded it wise in the reports to
ask for a specific answer without classifying the
data either resources liabilities.
Many savings bank officials have apparently as
sumed attitude. not only of hostility TO the law
itself. but to the fair administration Of il. The
law intended reach for the purpose of tax
alton only the surplus and undivided profits OF
the banks. and il is well known this surplus never
reaches depositOrs
The total tax last year was sl03.3S5 T. The total
amount Of deposits S9S7 762l sos So 1t Will read
lily be seen therefore that this consider
ally less than cne-tenth OF / per cent of the
amount Of deposits. 1t is stated however. that
many savings banks have made this tax an excuse
for reducing ther rate of interest from per cent
10 So per cent.