The Mount Holly news. [volume] (Mount Holly, Burlington Co., N.J.) 1891-1942, 1905-08-29
Assessment of Bank Stock.

subject which will be of interest to all
who own shares of stock in financial in
situations. There has been much discus
sion on this subject and the following
article will lend much light on it. The
items in the EgpOsitOr are copyrighted,
but THE News has been given permission
to produce this one.
In connection with this it may be said
the Farmers National Bank, of Mount
Holly Cat whose request permission to
publish was obtained) is looking after the
interests of it's stockholders and calls atten-
ton to the article. In due time the bank will
send to its stockholders instructions and
advice how to proceed under the law as here
defined. The E1p0sitor says:
1.-THE passage by the legislature of New
Jersey. last 'spriDg, of what were known
as the Buck bills, covering the manner of
assessing the shares of stock of national
and state banks of the state, has been the
foundation for good deal of controversy
between the assessors in different parts of
the state and the holders of bank stock
1.-THE shares of national and state banks
are assessed against the stockholders of
the banks, and the assessments are, of
course, collected from the stockholders,
while, in the case of the trust companies,
the assessments are against the companies
themselves and therefore they pay the
taxes. Under the federal law. government
bonds are not taxable, and hence the trust
companies have been able to deduct the
amount of government bonds held, and
any other non -assessable property, from
their total assets subject to taxation. But
no such deduction has been made when
assessing bank stock. This, it is claimed,
is unfair to the holders of bank shares and
it was to make plain the intention of the
legislature not to discriminate in favor of
either institution that the Buck bills were
passed.
1t would appear, however, that so far
as national banks are concerned, the
federal law contemplated substantially
what has been adopted by the legislature
of New Jersey; or, in other words, that
the acts of the legislature on the subject
are only reaffirmation of the laws of con-
gress. Section 5219 of the Revised Statutes
of the United States, which relates to
national banks, reads as follows:
Nothing herein shall prevent al, the
shares In any association from being in
cluded in the valuation of the personal
property of the owner or holder of such
shares, in assessing taxes imposed by au-
thority of the state within which the asso-
citation is located; but the legislature of
each state may determine and direct the
manner and place of taxing all the shares
of national banking associations located
within the state, subject only to the two
restrictions, that the taxation shall not be
at greater rate than is assessed upon
other moneyed capital in the hands of in
dividual citizens of such state, and that
the shares of any national banking asso-
citation owned by non-residents of any
state shall be taxed in the city or town
where the bank is located and not else
where. Nothing herein shall be construed
to exempt the real property of associations
from either state, county, or municipal
taxes, to the same extent, according to its
value, as other real property is taxed"
government has provided that the taxa
ton shall not be at greater rate than is
assessed upon other moneyed capital in
the hands of individual citizens of such
state This would certainly provide for
the exemption of government bonds re-
presented by the shares of the bank. But,
apparently, as stated, for the purpose of
leaving no question as to the intention of
the lawmakers of New Jersey on the sub
ject, the following acts were passed and
approved by the Governor, on the dates
indicated:
CHAPTER I'll, LAWS OF 1906
An act to amend an act entitled lar act for
the assessment and collection of taxes" APP
proved April eighth, one thousand nine
BE IL enacted by The Senate and General Assem- |
bty of the State Of NetO Jersey.
/. Section II of the act entitled San act for
the assessment and collection OF taxes" ap- |
proved April eighth, one thousand nine hun
dred and three, is hereby amended SO as to
read as follows:
II The sh ares of stock of every national
bank doing business within this state, and of
every state bank belonging to residents of this |
state, shall be assessed against the stockhold- |
ers in the taxing district where they reside; |
and the shares belonging to persons not resid |
holder in the taxing district where the bank
is located, and the tax assessed against such |
his stock from the twentieth day of May in |
each year, and said stock may be levied upon
and sold by the collector on default of pay
ment, and moreover 1t shall be the duty of
said bank to pay said tax assessed against
such nonresident on demand, and said bank
shall have lien upon the shares for such pay
ment, and may retain the amount so paid out
of the dividends that may be declared on
said shares. The real property of such cor
pOratiOns shall be assessed to the bank and
deducted from the total valuation of the
shares of stock assessed against the stock
holders 1t shall be the duty of the officers of
every bank to give to the assessor of each
taxing district on his application, a true
statement, under the oath of the president,
cashier or treasurer, of the names and resi-
dences of its stockholders in such taxing dis
tr1ct on the twentieth day of May in said
year, as shown by its stock books, and of the
number of shares held by each, and of the
a amount of its assets, capital stock and sur
plus, and the assessor is authorized to admin
lister such oath.
2 This act shall take effect Immediately.
Approved April %, 1905.
CHAPTER 234, LAWS OF 1905.
A supplement to an act entitled IAN act for
the assessment and collection of taxes ap-
proved April eighth, one thousand nine
hundred and three.
Be il enacted by The Senate and General As
seTIlbty Of the State Of NeW Jersey
l. In assessing the shares of stock of banks
or banking associations organized under the
laws of this State or of the United States the
assessor shall allow ali the deductions and ex
empttons granted by law from the value of
other taxable property owned by individuals
in this State, and the assessment and taxa
tion of such shares of stock shall not be at
greater rate than is made or assessed upon
other moneyed capital in the hands of indf-
viduals in this State. In making such assess
ment, the assessed valuation of the real pro-
perty of such bank or banking association ]
shall be deducted from the total valuation of
the shares of stock assessed against the stock
holders.
2. This act shall take effect Immediately.
Approved May II. 1905.
ut will be observed that provision s
made for not taxing twice the realty
owned by the banks, as that shall be as
sessed to the bank and deducted from the
total valuation of the shares of stock as
sessed against the stockholders 1t is
plain that similar deduction must be
made for government bonds, as it is pro-
vided that the assessor shall allow all the
deductions and exemptions granted by law
from the value of other taxable property
owned by individuals in this state, in as
sessing the shares of stock of banks
or banking associations.
''All that the holders of bank shares ask
for is, that they shall be treated as fairly
as the holders of the stock of other SINH
lar institutions, such as the trust compan-
les, are treated. The banks of this state
own about eleven million dollars worth of
government bonds, and the banks of tn
city of Newark, alone, have nearly four
millions thus invested. The injustice of
the system of taxing those bonds, indirect
lY, by taxing the bank shares which repre-
sent their ownership, while deducting the
government bonds held by trust compan-
les, when assessments are made, has been
removed by the acts of the last legislature
THE action of the banks of the state in
regard to the new law has not been uni
form. In some cases the matter has been