Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1905-02-28
The Goose of the Golden Egg.

ne Goose OF tne SoioeH G99'
This letter from Comptroller Gener-
al Jones to Mr.. r. C.. Allein, cashier
Of the First National Bank Of Yorkville
is Of more than ordinary interest at
this time:
Answering your letter Of the 22d in
slant, I beg to say that 1t has been
repeatedly decided by the United
States courts that 1t Is not within the
power Of the state to impose a license
tax upon national banking associations
before they can do business In the
state, and therefore the License Tax
Act of 1904. applying to corporations,
cannot be construed as applying to ma
tional banking associations.
On its face, and taken by itself, this
would look like a mere acknowledge
ment that national banks are not sub
ject to the corporation license tax Of
1904, and that Is all there Is Of 1t;
but we think we see something more,
and it Is just as we'll perhaps to go
into further details.
AS everybody is aware, the finances
of the state have been in a bad way
for several years. There are those
who claim that it could not be helped;
that those in charge have been man
aging splendidly; that nobody could
have done better, etc. There are 9TH
ers who think that the responsible
managers have been a little too liberal
with the money of the taxpayers, and
that the remedy for private business
in like straits would be the bank
ruptcy courts.
When the lawmakers first began to
realize the shortage last year, they
sought a remedy not in cutting down
expenses; but in raising more money
and the expedient which seemed to
commend itself with most favor was
to tax corporations, and accordingly
they passed what is known as the IL
cense tax act.
This act which was put on the stat
ute books last year, provides special
license on all corporations. In reality,
of course, it Is a tax; but by fiction
Of the law it is known as a license.
Otherwise. 1t would be unjust taxation
and therefore null and void under the
| constitution.
For obvious reasons, 1t was imprac-
ticable to put the machinery Of the
new law in operation last year and no
effort was made to collect this tax un-
til within the past few weeks, since
when the Office Of the comptroller gen.
eral has been giving the matter much
Of its attention. Many corporations
have been paying up without much
protest. All Of them have been i'm
pressed with the injustice Of the thing;
but they had no way Of helping them
selves, and there was nothing to do
but pay.
The trainers of the national bank
ing laws foresaw the necessity Of
protecting the institutions they were
arranging to create from unfriendly
state legislation, and they did 1t thor
oughly. They conceded to the states
the right to tax National banks as
other institutions were taxed; but they
took care to provide that there should
be no special licenses or other re-
strictions that might impose discrim-
mating hardships. etc. And in their
work they left no loophole.
AS to whether the trainers of this
corporation license law intended to
no way Of knowing. 1t is probable
that they never so much as thought
of the Federal laws on the subject; but
now they have the matter forced
on their attention in a way which will
probably give them more or less con-
Germ.
AS the result of the letter of Cashier
Allen, Comptroller Jones is at once
brought to recognize limit beyond
which he cannot go. He may collect
this double taxation from other cor
porations because they have no way
to help themselves; but at the doors
Of the national banks he must stop.
Otherwise he will get into an argument
with the Federal government, and be-
cause he knows the result Of that ar
gument in advance, he very prudently
prefers to remain where he is.
But what about the state banks?
The theory of the government has been
to keep them on a footing equally ad-
vantageous with national banks. This
recent development gives the national
banks a most decided advantage. Will
the state government then insist on
making the state banks pay the tax?
There are some no doubt, who will
say yes, their judgment being char
acterized by the same disregard Of
Justice that led to the original passage
of the law. But will the state banks
stand it? Not for long, we venture.
They will find it more advantageous
to give up their state charters in ex-
change for franchises under the ma
tional banking laws.
And if this unjust license tax can
not be collected from the banks, why
insist upon it's collection from other
corporations. The whole thing Is
clearly wrong, and the sooner this fact
is recognized the better it will be for
all concerned.