The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1906-08-16
MUST Be ASSESSED At MARKET VALUE
QUESTION RAISED IN MANY POR
TIoNS OF THE STATE Is Ex.
PLlCITLY ANSWERED,

of any ruling by the courts on the sub
ject, the state tax commission has
passed on the question of the proper
valuation to be put on real estate thai
is owned by banks, in connection with
the assessment of bank stock. The tax
commission says such property should
be assessed at its market value.
The inquiry at hand comes from the
board of equalization of jefferson coun-
ty, but the question raised is encoun-
tered in various parts of the state. In
Port Townsend the local banks had
been obliged to take property on fore
closure proceedings which cost the
banks much more than the property
was worth in the market. In other
counties the same question is pre-
scented where property is worth much
more than what it cost the banks.
"a rule to be equitable says Com
sioner ]. H. yesterday for the tax
board should work both ways In
conclusion, Mr.. yesterday says:
Bank stock should be assessed at it's
market value after deducting there
from the market value Of real property
owned by such bank
What Commission Holds.
The opinion by the tax commission
is as follows:
Your question of August 8, relative
to the taxation Of bank stock is:
Should there be deducted from the
market value of bank stock the real
property owned by such bank at its
market value or at the value which it
has cost the bank"
Replying thereto we have to say:
We fail to find any adjudication of
this subject in our own state, or in any
of the states having similar statutory
provisions, and are, therefore, without
the aid of judicial logic in interpreted
ton.
A recurrence to fundamental princi-
pies suggests that the policy Of state
abhors double taxation, and by the
same token shrinks from inadequate
taxation.
When the legislature allowed the
amount invested by bank in real es-
tate to be deducted from the value Of
its shares of stock it was for the pur-
pose of avoiding a double taxation.
The equity of this proposition can be
illustrated as follows:
A bank commences business with a
capital stock Of 100000, and invests
$4,000 in real estate for it's business
needs. The real estate is assessed
the same as other real estate, and the
bank pays on the capital stock as of
the value of 100000. In this instance
there is a complete taxation without
overlapping or shrinkage. The coun-
ty cannot complain and the bank
should not be heard if it does complain
Should Work Both Ways.
The bank contends that it should
be conceded as a deduction from the
value of it's capital stock the amount
of money for which it took real estate
in satisfaction of debt, irrespective of
the true value of the realty. To IL
lustrate the inequality of this propo-
sition: A bank loans 100000 to a fav
orite stakeholder and is compelled to
take a piece of property worth only
SIC, 900 in satisfaction of the debt If,
by judicious management of other
business, its capital stock of, say,
100000 is worth par, can it be said,
in the light of reason, that this unfort-
innate loan should be a bar to the
collection of taxes on the reasonable
value of the bank stock?
A rule, to be equitable, should work
both ways.
If the conditions should be reversed
and the land taken in satisfaction of
debt increased ten fold, would the
bank contend that less than it's full
value should be deducted from. the
value of it's capital stock?
The questions answers itself. To
adopt such a construction as is con-
tended for by the bank would render
the county and state dependent for its
revenue upon the business sagacity
and legerdemain of managing officers
a proposition which does violence to
equal taxation.
What the Statute Says.
The statute governing this deduction
is as follows:
after deducting from the capital of
said bank the actual portion thereof
invested in real estate, which real es-