The Hawaiian gazette., 1907-10-18
AS To TAXATION
Of BANK SHARES

The Supreme Court yesterday de-
cided the matter of the assessment OF
NJ. P. Robinson and Cecil Brown for
stock held by them in the First Ma
tional Bank of Hawaii The court de-
cides that under our statutes National
Bank stock is not taxable by the
Territory, but that the Legislature,
by passing the right kind of an act
the requirements of which the court
points out, may make it taxable.
The following is the decision of the
court:
OPINION OF THE COURT BY
WILDER, J..
This is an appeal by the tax asses
sor of the first taxation division from
decision of the tax appeal court re-
against Cecil Brown and NJ. P. Robin
son on their shares in the First Ma
tional Bank of Hawaii.
Section 5219 of the United States
Revised Statutes provides that Moth
ing herein shall prevent all the shares
in any association from heing includ-
ed in the valuation of the personal
property of the owner or holder Of
such shares, in assessing taxes i'm
posed by authority of the State within
which the association Is located: but
the Legislature of each State may de-
termine and direct the manner and
place of taxing all the shares of ma
tional banking associations located
within the State, subject only to the,
two restrictions. that the taxation shall
not be at a greater rate than is as
sessed upon other moneyed capital in
the hands of individual citizens of
such State, and that the shares of any
national banking association owned by
nonresidents of any State shall be
taxed in the city or town where the
bank is located, and not elsewhere.
Nothing herein shall be construed to
exempt the real property of associa-
tons from either State, county or mu-
nicipal taxes, to the same extent, ac>
cording to it's value, as other real
Territories have the same power as
the States in respect of taxing ma
tional bank shares. Talbot v. Silver
Bow County, 1S9 U. S. ABS.
The contention of the assessor is that
national bank shares are public
stocks" within the meaning of r. l.,
Section 1915, providing that personal
for purposes of taxation shall
mean and include, among other
public stocks and bonds not
exempted by law from taxation" and
that as such they are taxable pursuant
TO the Federal statute referred to.
Oh
public stocks would seem to follow
the case of Oahu Railway Co. V.
Brown, Haw. 16S, which held that
Oahu Railway & Land Co.'S bonds
could not be taxed as public bonds"
In the opinion in that case it was said
on D. 165, I'VE take the word public
to mean of or relating to the govern
ment." The distinction between the !
and technical meaning of
public" was pointed out. In view of !
that meaning of the word public" it |
can not be said that national bank /
shares are public stocks" In Hall V. !
County Commissioners of Middlesex,
10 Allen 100, il was held that bonds |
ssued by a State and a city for aid
ng in the construction of railroads
we're public stocks and securities"
And in Hale V. County Commissioners |
If Hampshire, 137 Mass. Ill, it was
held that bonds issued by a railroad /
which was created by |
Congress and to which Congress had
made large grants of land to aid in
is construction for public purposes,
he mortgage securing the bonds be-
ng as required by law filed in the
,ffice of the secretary of the interior,
md the corporation being to some ex-
ent subject to government control,
we're not public stocks and securf-
les" These two Massachusetts cases
re in line with the opinion of this
curt in the Oahu Railway Company
ase A national bank is organized
Inder an act of Congress, is subject
o government control, and serves q
'ublic purpose, but it is also organized
or private business and with a view
o individual profit, and it's shares,
according to the ruling of this court
n the Oahu Railway case cited, are
lot taxable as public stocks
There appearing to be no statute of
his Territory taxing national bank
hares in accordance with law, it is
TO discuss any other ques-
ion submitted.