The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1906-11-21
TAXATION OF STATE BONDS.
Important Ruling BY Comptroller
General Jones Affecting Banks OF
the State.

Columbia, Nov. 14.-Hon. A. w.
Jones, comptroller general, has re-
ceived from the city clerk and treas
urer of Sumter, an inquiry Of very
important nature as to the exemption
from taxation of the shareholders OF
banks who hold United States and State
bonds. The points raised by Mr.. Z.
NJ. Hurst, the city treasurer, are quite
important and the comptroller gen.
eral has ruled as follows:
Mr.. c. M. Hurst City Clerk and
Treasurer, Sumter, S. C.
Dear Sir: am in receipt of your
favor of the 9th inst, in relaxation
of shareholders Of banks. You ask to
be advised whence comes the right
of shareholders to exemption from
United States or State bonds. You
state correctly "that the assessment
is on bank stock values, not on bonds.
You also state hypothetical case OF
assessments: "That if one has $1,000
bank stock (par) which has value
of $500 and he is assessed on it 10
per cent, then he should pay on ST.
125; this is correct, provided the bank
has no investment in South Carolina
State securities, nor possessed of any
real estate, otherwise from the mar
ket or true value Of the shares must
be deducted the investment in State
bonds, also the real estate value as
assessed for taxation which is charged
to the bank.
Answering you briefly as to. the
right of stockholders to exemption
from State bonds, the act Of 1892
in providing for the redemption of
brown consol bonds and stock Of the
State by issue Of other bonds and
stocks, provided in sections II and IA,
THAT said bonds and certificates Of
stock shall be free from all
State, county and municipal taxes"
THAT so much Of the capital stock
or bonds of any bank, banking as
sociation or other corporation of any
nature or kind located within this
State, as is or shall be invested in
bonds and stocks Of the issue provided
for in this act shall be exempt from
State, county, township, municipal or
other taxation"
In 1898 an act was passed amend
ing and constituting act Of 1892 as
follows: That section IA shall be
held and construed as intending and
meaning to exempt and as exempting
from State, county, township munic-
ipal or other taxation, not only so
...ucH OF the capita. sock or ponds Of
any ba aN. banking association or
e1ler corporation or any nature or
k;nd located within this State
but also the saares OF stock i-3 TIC
hands of individual shareholders as
shall be in proportion to the amount
of capital so invested and represented
by said shares and certificates Of
stock
AS to the exemption Of shareholders
for investment Of banks in United
States securities, I can find no author
ity Of law, and am Of the opinion that
no exemption should be allowed
shareholders in banks for any in
vestment in United States securities.
This opinion is confirmed by refer
ence to United States supreme court
decisions limiting the power Of the
State as to taxation Of national banks.
(U. Sd A State cannot tax nation
al bank except upon its real property
(Stopylin vs. Thaggard, 81 Fed. Rep.
93)
Omitted States supreme court.)
The entire interest of shareholders
may be taxed Without GilN OcOuCl1Ol1S
for that portion Of the capital which
is invested in United States securities
(Van Allen VS.. Assessors, 3 Wall.
57s).
Omitted States supreme court 1919
The act Of congress of June, 1864.
in relation to the taxation Of national
banks does not curtail State power as
to the subject Of taxation or cut off
the right to except certain kinds of
property if a legislature choose to do
so. It's object is to prevent unfriend-
ly discrimination against national
banks (Adams VS.. Mayor, ETC., Of
Nashville, 95 U. S. 10; ct B. C. 1S4).
You asked to be advised further ''If
this bond exemption be authorized
and required by law should not the
amoant OF bonds as exempted be first