Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-11-09
ASSESS Bank SHARES
Court Decides That the Saw
ings Bank Must Pay Taxes
on Their Stock
DECISION OF DISTRICT COURT
Holds That the Assessment May Pro-
perly Be Made Against the Bank as
a Corporation, the Effect Being the
Same as Taxing the Individual
Shareholders.

Special to Times Republican.
Des Moines. Nov. 9.-Judge Howe, II
the district court here, has rendered hi:
decision in the case involving the ques-
| ton of the assessment of the stock Of
savings banks. He holds that the val
ue of the shares of stock of savings
bank may be assessed against the
bank. He held that IL the assessment
were made against the bank, taxes
could not be collected to this amount OF
the United States bonds held by the
bank; but in assessing shares against
the holders. he decided that no deduc-
lion can be made because the bank
holds government bonds TO the amour;
OF part OF its capital.
In The case decided. which was ap-
pea!ad from the city board of review, i,
was conceded that tina amount OF
United States bonds held by each OF
the plaintiff hanks was MS follows: Des
MoiEes Savings Bank, $1S3,S1165;
Home Savings Bank, $a2.253; Peoples
Savings Bank. s62.oS0. Judge Howe
said in part:
"A tax on the shares OF bank is
not tax on its capital. This distinc-
ton has been fully recognized by many
courts, among which are the supreme
court of the United States and the SUI
preme court of Iowa, and is q settled
doctrine of law.
IF the tax be OH the capital OF the
bank. and not on the shares of stock.
the bank is entitled to a deduction on
account of its capital invested In
United States bonds.
IT. however. the tax be on the shares
OF stock held by the individuals, ana
not on the capital OF the bank. the
bank is not entitled to q deduction on
account of its United States bonds.
1T is contended that the statute un-
der consideration is invalid because It
requires the bank. as a corporation. to
pay the tax on the shares of stock of
the Individual shareholders. 1t is said
that this Is taking the property of one
person pay the debt of another, and
that said statute is therefore unconsti-
tutional
1T Is we'll settled in national bank
cases, however. that banks may be re-
CURED to pay the tax on shares of
stock of the shareholders and that sucn
provision does not invaltdate a statute.
This being true as to national banks,
It Is equally true as to savings banks.
whether. under the statute, the
capital may be taxed as we'll as the
shares of stock. we do not determine,
for no such question is before US, no
attempt having been made to tax the
capital OF the bank. The statute IN
der consideration Is simply an enlarge
ment of chapter SO. Of The act OF this
Twenty third general assembly, and is
in no sense different therafrom in so far
as it applies to banks organized under
the laws, of this state. Under that act
it was held In Bank VS.. Rerick, 90 Iowa,
23S, "a N. w. sol. that banks designated
therein were liable for the tax assessed
to them on the shares of stock held by
and 1t is said in answer to
the contention that the bank, under
such circumstances. would be paying
taxes on property that II did not own;
but AS the capital of state bank is
really owned by the stockholders and
as It Is reduced by the amount paid
for taxes. its value is reduced by a sum
equal to that paid, and the shareholders
do, in effect, pay the taxes This
can not be successfully
controverted for the reason that the
bank is owned by Its stockholders, and
II it is making money and is paying
dividends, and reserving a surplus, the
payment of the tax by the corporation,
instead of by the individual stock
holders, affects the value of the stock
exactly the same; and his Is equally
true If the bank is not prosperous. This
method of assessing and taxing the
shares OF assessing banks was UNI
adopted for convenience, and
for the purpose Of reaching valuable
property which might otherwise es-
cane its lust share Of the public bur-
dens. and does not. in our judgment,
compel payment OF the tax by those
who do not own the property.
."rhe national banking act does not
curtail the power Of the state to tax
shares OF stock in banks whose capital
may he invested In United States bones,
nor prescribe to the state the mode In
which the tax shall be collected,
whether from the shareholders or from
the corporation. Its only purpose Is
to prevent unfriendly discrimination
against national banks. and to this END
y nroyides that the tax imposed shall
not he at a greater rate than Is as
sessed upon other moneyed capital IN
the banks Of individual citizens of such
state"