The Hartford herald. [volume] (Hartford, Ky.) 1875-1926, 1907-10-02
DRIVEN AWAY
BY TAXATION
ver Large Capital withdrawn from
kentucky.
The Case Of the Walsh Estate In Lex.
Inston Points Out Danger
ous Result Of Our Tax
System.


given a very striking demonstration
In Lexington. The estate Of Mrs.
Clara Bell Walsh, amounting to about
$750,000, had been for many years
managed b. the Security Trust CON-
pany of Lexington, as trustee. A Pc
tition was filed recently In the Fay
cite circuit court. asking the court
to terminate the trusteeship, so that
Mrs Walsh might put her property in
the hands of a trust company in St.
Louis. The Security Trust company,
which had been acting as trustee, did
not oppose this suit, 1t being distinct
ly stated in the petition Of Mrs. Walsh
that the services of the trust company
had been in every way satisfactory
but that the taxes imposed upon hef
property were too burdensome.
The peculiar feature of the case lies
in the fact that Mrs. Walsh, herself,
resides in st. Louis and. therefore,
claims that her personal property
should not be taxed at Lexington in
the hands of her trustee. The court
of appeals having held otherwise, and
Mrs. Walsh, not feeling justified in
paying a tax rate of S2.70 on the
stocks, bonds and other investments
in the hands of the Kentucky trustee,
since she could not derive any posi-
BILE good from the payment of this
tax. decided to remove the property
to the state of her residence.
A considerable part Of the est1te
was invested In local securities-the
bonds of local corporations and real
estate mortgages. This will mean
that the money will gradually be with
drawn from investment in these local
securities and reinvested by the st.
Louis trustee in other securities, thus
constituting a loss of that much
money to enterprises In and around
Lexington and Fayette county. 1t
means Just that much greater scarcity
of needed capital
The Lexington Herald has been,
with great energy and skill, showing
the result of this sort of taxation on
the business interests of the state. II
points out, among other things, the In
in the decisions of our
which hold that man WHO
lives in one Kentucky county and has
intangible personal property, such as
stocks. bonds, or money, in the hands
of a trustee in another county of Ken
lucky. must pay the tax in the county
of his residence and not in the county
where the trustee resides; but ii the
owner Of the property moves entirely
out of the state. then he must pay
tax In the county where the Trustee
resides. s-well as pay the tax in the
state where he takes up his new rest
denca. thus constituting double tax
alton
Consumed With Taxation.
In her PETITION asking for the
change Ia tru5teeship Mrs. Walsh
Gays: plaintiffs desire, If said Clara
Bell Walsh be not entitled 10
discharge of the trustee, that
there be change in the per-
son Of said trustee, and if IL can
be done that the funds and property
in trust be transferred to trustee
duly qualified under and resident in
the state of Missouri, where they
have their home. Plaintiffs state that
the reasons why change OF trustee
10 desired do not In any manner relate
10 the conduct or fidelity OF said trus-
tee. but are ON account Of the heavy
burdens OF taxation imposed on said
estate by reason of the residence OF
the trustee in'a state and city differ
eut from the home OF the beneficiary"
Court Of Appeals Decision.
The Herald adds the following fact
as TO the case. Under this decision OF
the court, Mrs Walsh's personal prop
ariy in the hands Of the Security
Trust company would be liable for
city, state and county taxes here; and
realizing that she. a nonresident OF
the state, could derive no possible
benefit from taxes paid TO the city ON
her personal property. Mrs. Walsh
takes this means Of getting possession
Of her property. The removal OF
the estate TO another state 10 a power-
full argument against the wisdom OF
the system OF taxation In force In
Kentucky: for though the invest
ments made by the trustee in local
securities are so safe and highly re-
garded as to be retained. yet when a
reiuvestment Is made II is likely that
large portion OF the funds will be
invested elsewhere. thus depriving
this community and state Of so much
badly needed capital for it's progress
and DEVELOPMENT I'm
Poverty or Perjury.
"A prominent attorney Of this CRY,
in discussing before the Taxation
Committee OF the Kentucky senate In
1905 the tax system OF our state. de-
nounced our personal property tax Ms
necessarily leading either TO poverty
or perjury. We DO not know whethes
any statistics on the subject are avail
able. but we think II "a safe guess that
ut least threefourths of an the intsp
gible personal property. such ~
bonds, notes. end cash which is as
sessed for tAsetion IN Kentucky. 10 IN
the hands OF hduoiaries. Is n fair